This study examines the strategic and operational outcomes of effective implementation of quality improvement initiatives in different service operational environments. Using a sample of 354 service organisations, this study utilises a structural equation modelling (SEM) approach to investigate the effectiveness of quality improvement initiatives. The results show clear strategic and operational benefits of effective implementation of quality improvement initiatives. The study concludes that the quality improvement efforts of service organisations should be viewed from a system-wide perspective. This systematic orientation leads to benefits which are not always achievable based on a piece-meal implementation orientation.