Effects of ISO 9000 certification on firms' performance: A vision from the market

Linking ISO 9000 certification to firm performance and financial crisis: a matched sample longitudinal analysis

Purpose

This is a longitudinal study exploring the effect of ISO 9000 certification on firm's financial performance in the pre-crisis period and the 2008 financial crisis period.

Design/methodology/approach

The empirical analysis is based on a 22-year dataset with balance sheet data from 136 Greek listed firms covering the period 1992–2013. A matching technique is applied to properly estimate potential differences in the impact of ISO 9000 on firm's financial performance between the groups of certified and matched non-certified (control) firms in the entire period but, most importantly, in pre-crisis vs crisis periods, using the difference-in-differences econometric approach.

Findings

The findings indicate that certified firms exhibit significantly higher financial performance relative to the matched non-certified group in both the pre-crisis and crisis periods, which tends to persist for several years post-certification. The financial crisis has a negative and statistically significant effect on firm performance in both the certified and matched non-certified groups, which nevertheless did not differ significantly between them. Controlling for sectoral and technological differences did not harm the higher performance of certified firms relative to the matched control peers. The results remain in the same direction when the authors test the ISO 9000 effect in the sub-group of certified firms that obtained the certification at the firm-level.

Originality/value

The study is original in its sample design and hypothesis testing. The matched sample created from a sufficiently long and continuous time dataset enabled the authors to properly estimate firm performance differences of ISO 9000 between pre-crisis and crisis periods. Of additional value is the testing of sectoral/technological differences and the distinction between firm-level and plant-level certification.

The financial impact of a withdrawn ISO 9001 certificate

Purpose

– The purpose of this paper is to assess to what extent the loss of the ISO 9001 certification affects the decertified firms’ financial performance.

Design/methodology/approach

– Using standard event study methods, this paper matches a sample of 143 Portuguese companies that lost their ISO 9001 certification with similar non-event counterpart firms (according to return-on-assets (ROA) and size) and compares the performance of these two groups of firms using financial data collected from the AMADEUS database.

Findings

– Results show no statistical significant differences in the financial performance (as measured by ROA, return-on-sales (ROS) and sales growth) between companies that lost their ISO 9001 certification and their matched firms. Although the literature suggests that certification improves firms’ performance and that the benefits of certification may last over long periods of time, this paper’s results suggest that, after decertification, companies do not exhibit over or underperformance in their operations vis-à-vis comparable firms that do not undergo the same event.

Originality/value

– As far as the authors are aware, this is the first study assessing the impact of ISO 9001 certificate withdrawal on the decertified firms’ financial performance.

ISO 9000 as an organisation development intervention

Purpose

The purpose of this paper is to investigate the nature of ISO 9000, illustrate how ISO 9000 can be implemented in face of strong resistance to change, and demonstrate how comprehensive work redesign for higher organisational effectiveness can be realised through ISO 9000 implementation.

Design/methodology/approach

A novel model and process for ISO 9000 implementation in an Indian public sector manufacturing industry have been described. After successful implementation in several production units, the model was examined for congruence with well‐known frameworks in Organisation Development (OD).

Findings

The model has congruence with several OD frameworks. It complements OD by harnessing organisational knowledge through creative involvement of organisational members, adopting three‐tier working to involve the organisation at different levels, employing three‐phase execution to sustain organisational members' motivation throughout the programme; and realising comprehensive work redesign while attaining ISO 9000 certification.

Originality/value

The study show‐cases ISO 9000 as an excellent OD intervention.

The historical impact of ISO 9000 on Lebanese firms

The objective of this paper is to assess the impact of the new ISO 9001:2000 standard on the Quality Management Systems (QMS) of Lebanese firms that were already certified under ISO 9000:1994. To get an accurate feedback of stakeholders in a firm, three different questionnaires were developed and distributed to management, employees, and customers respectively. Empirical results indicate that ISO 9001:2000 has improved the QMS performance of Lebanese firms over that of the 1994 edition. Nevertheless, results showed that the new standard still has some weaknesses when it comes to improving suppliers' relationships and empowering employees.