A triple analysis of ISO 9000 effects on company performance

Motivations for ISO 9001 quality management system implementation and certification – mapping the territory with a novel classification proposal

Purpose

This paper aims to identify and characterize the motivations for ISO 9001 quality management system (QMS) implementation and certification, with a novel, valid and business-oriented scale applied to a large sample. Instead of adopting a normative approach focusing on the internal/external nature of the motivation, this investigation aims to emphasize the ISO 9001 driving forces from an instrumental (productivity, market and competitiveness) perspective.

Design/methodology/approach

This study is framed with a quantitative methodology supported by an email survey encompassing a sample of 526 Portuguese ISO 9001 certified organizations. Descriptive statistics, exploratory factorial analysis (EFA), t-tests and correlation analysis were performed according to the proposed research questions.

Findings

Regarding the motivations, three factors were obtained by applying EFA: market, productivity and competitiveness. The respondent organizations consider the productivity factor (mainly related to internal motivations) to be the most important. Concerning the other factors, competitiveness in the sector is ranked second and the reasons related to the market come in third. Additionally, organizations of medium dimension (between 50 and 249 employees), certified up to 1999 or from the private sector, give greater relevance to motivations related to the market and competitiveness.

Research limitations/implications

This investigation suffers from the limitations inherent to the survey methodology (e.g. potential bias) and a Portuguese sample’s restrictions. Moreover, this research does not cover organizations that have been certified after 2015, namely, with an initial ISO 9001:2015 certification. Nevertheless, most of the respondents’ organizations remain ISO 9001 certified today.

Practical implications

The information provided allows managers to know the driving forces and motivations behind seeking ISO 9001 certification. It can assist certification bodies in fine-tuning their marketing strategies to attract new customers and support ISO 9001 stakeholders in the ISO 9001 revision cycles.

Social implications

Policymakers can also adjust policies to foster ISO 9001 certification accordingly. Furthermore, as Wawak et al. (2020) suggested, with ISO starting a new revision cycle for ISO 9001, an increase in the research topic is expected. This study brings additional knowledge that can assist ISO stakeholders in that process.

Originality/value

This study presents a novel, valid and more business-oriented scale to characterize and identify the motivations for ISO 9001 QMS certification and maps the driving forces for ISO 9001 certification in a large sample size of diverse organizations. The instrumental nature of the scale (productivity, market and competitiveness) improves the consistency with recent research on ISO 9001 contributions for organizational performance compared with previous scales that focused on the internal/external nature of the motivation.

Stock price reaction on ISO 9001 certification announcement: evidence from Indonesia

Purpose

Certification information published by a company will be responded by the market. Therefore, the purpose of this study is to examine the impact of ISO 9001 certification on the stock market reaction as indicated by stock returns reaction of companies in Indonesia.

Design/methodology/approach

This study used event study method with the period of 13 days. It consists of 6 days before and after ISO 9001 certification announcement and 1 day at the time of the event. It analyzed by using pair sample t-test and one sample t-test. The stock return data is obtained from companies that are ISO 9001 certified and it tested for their stock reactions before and after the certification.

Findings

The results of empirical research showed that the average and companies cumulative abnormal returns in Indonesia react quickly and positively on the first day after ISO 9001 certification announcement. This study proved the differences between abnormal returns before and after the ISO 9001 certification announcement period.

Research limitations/implications

The company's success in implementing ISO 9001 will have an impact on investment in the capital market with a positive response from stock market players. The implication of this study is the further research can examine directly the impact of ISO 9001 implementation on investor behavior in the capital market.

Originality/value

Based on the development of the literature review, this is the first study which examined the impact of ISO 9001 certification announcement on investor reactions in the short term. Therefore, companies in Indonesia need to implement a quality management system for investors in Indonesia.

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.

Does ISO 9000 Certification Benefit Service Firms?

This paper examines whether ISO 9000 certification benefits service firms in terms of their financial performance and promotes sustainable improvement. We argue that in a developing country setting such as China, the massive benefits brought by the signalling effect of the certification can discourage firms’ motivation to fully implement the standard of certification and lead to the decline of investment on productivity-improving activities. In other words, the certification may have negative effects on the productivity of certified firms. We investigate 89,024 firms in Chinese service industries to assess the impacts of the certification on sales, productivity and profitability of these firms. To address the potential selection bias of ISO 9000 certification, the Propensity Score Matching method and Coarsened Exact Matching method were used. Our key findings are that the ISO 9000 certification does help to increase the total amount of sales, but it decreases the productivity and profitability of these certified service firms. We also find that earlier certifiers seem to gain larger advantage in sales but more reduction in productivity, and firms with higher level of technology intensity seem to obtain a larger increase in sales and less productivity loss after receiving their ISO 9000 certification.

An investigation of the satisfaction of project managers and team members

Purpose

The purpose of this paper is to compare the job satisfaction levels between International Organization for Standardization (ISO) 9001-certified and non-ISO 9001-certified project-based companies in Jordan, for project managers (PMs) and project team members (consultants, engineers and architects).

Design/methodology/approach

The study sample consists of individuals from the aforementioned four roles of ISO 9001-certified and non-ISO 9001-certified companies. A questionnaire survey was used to collect the data from 57 companies. In total, 72 valid questionnaires were returned, yielding a response rate of 92.98 percent. The data obtained were statistically analyzed, and then the independent t-test was used to test the study hypotheses.

Findings

The results revealed that ISO 9001-certified companies experience higher job satisfaction level for the four roles compared to non-ISO 9001-certified companies. Between the two samples, it was noted that there is a significant difference in the PMs’, consultants’ and engineers’ satisfaction with co-workers and without any remarkable difference in the specific satisfaction. No significant difference between the two samples in general satisfaction was found for PMs and engineers. Finally, no significant difference was found in three satisfaction elements for architects.

Research limitations/implications

Understanding the linkage between being ISO 9001-certified company and project members’ job satisfaction can provide a new strategic direction for project-based companies’ performance management that can help in achieving superior work outcomes. A small sample size is considered the main limitation of this study.

Originality/value

This study attempts to fill the knowledge gap that is rarely investigated in the literature, i.e. the link between being ISO 9001-certified company and the level of project members’ job satisfaction.

Implementation of Integrated Management Systems and Corporate Social Responsibility Initiatives—A Romanian Hospitality Industry Perspective

The growing market value of a company remains the main concern of the management, as well as of the shareholders. Implementing integrated management systems is not always easy and is not low-priced either, but the benefits to clients, management, employees, or shareholders are considerable. At the same time, the involvement of companies in corporate social responsibility activities represents a return of part of the benefits to the community, the benefits being found on multiple plans for all the stakeholders. Through this study, we aim to identify the effects of implementing integrated management systems and quantify the influence of corporate social responsibility initiatives on the market value of hospitality industry companies in Romania. Analyzing the results of the study demonstrates the existence of a direct correlation between the implementation of integrated management systems and the evolution of the economic performance of the companies. Also, the results reveal a positive correlation between the existence of corporate social responsibility initiatives and the increase of the market value of Romanian hotel industry companies.

The moderating effect of motivations on the relationship between obtaining ISO 9001 certification and organizational performance

Purpose

– The purpose of this paper is threefold, first to investigate if ISO 9001 certified companies in an Iranian province (Kermanshah) perform better than non-certified ISO 9001. Second, what is the main motivation of the manufacturing companies of Kermanshah province on obtaining ISO 9001 certification, i.e., internal or external motivations. And finally, if ISO 9001 certified companies with high scores of internal motivations, show better levels of performance in comparison with certified companies obtaining low scores of internal motivations.

Design/methodology/approach

– A survey questionnaire was distributed to the 350 companies with ISO 9000 certification, and a total of 287 usable responses were returned. Using a structural equation model, this study empirically examines the relationship between ISO 9000 implementation and firm performance, and the moderating role of firm motivation on organizational performance.

Findings

– The results demonstrate that ISO 9001 certified companies show better organizational performance than non-certified ISO 9001 companies and internal motivations play more important role on obtaining ISO 9001 certificate than external motivations. Also ISO 9001 certified companies with high scores of internal motivations show better levels of performance than those ISO 9001 certified companies with low scores of internal motivations.

Research limitations/implications

– The sample is restricted to only a single region and manufacturing, so it would be strongly recommended that data be gathered from various parts of Iran including both manufacturing and service industries. As in this study the data gathered were cross-sectional, it is recommended in order to gain deeper understanding of the cause-and-effect relationship among the variables data to be gathered longitudinally.

Originality/value

– This study represents a first attempt to construct a conceptual framework that integrates the motivations behind implementing ISO 9000 certification, and ISO 9000 performance in the context of Iran and gives a particular focus on the Iran manufacturing companies.

The effects of ISO 9001 certification on the performance of Greek companies

Purpose

– The purpose of this paper is to examine the benefits of ISO 9001 certification and the association between them, the level of implementation of the critical success factors (CSFs) required for the appropriate functioning of the quality management system in ISO 9001:2008 certified companies and between other demographic variables.

Design/methodology/approach

– A research project was carried out in Greek companies from all business sectors using the questionnaire technique. The selected companies implement a quality management system in accordance with the ISO 9001:2008 standard. Correspondence analysis, a methodology from the field of multidimensional statistics, was used to identify significant differences between the effects on performance and other variables such as the implementation level of CSFs relating to the quality management system and years of certification.

Findings

– External benefits seem to be more important than internal benefits. The least important benefits were mostly business results, such as profits, costs and market share. Differences were detected between the level of performance and certain demographic variables such as the use of International Organization for Standardisation (ISO) alone, size and years of certification. The certified companies have generally benefited from ISO implementation.

Research limitations/implications

– The study was based on the perceptions (subjective data) of only one quality manager/representative from each company. The motives for ISO certification, which can seriously affect the benefits derived, were not examined.

Practical implications

– The measures presented here can be used by certified companies to evaluate performance (financial or not) related to ISO 9001 certification and to discover those factors that contribute to the better exploitation of the ISO 9001:2008 standard.

Originality/value

– This paper aims to evaluate performance since the implementation of the ISO 9001:2008 standard in Greek companies, which are confronting a tough economic environment and to analyse this data with a methodology from the multidimensional field, with the complementary use of some special tables of coincidence.

Standards and innovation in manufacturing and services: the case of ISO 9000

Purpose

– The research empirically investigates the firm-level impact of ISO 9000 certification on innovation propensity. The study aims to distinguish between manufacturing and service sectors and adopts different innovation definitions aimed at capturing the peculiarities of innovation in services and small firms.

Design/methodology/approach

– Relying chiefly on Community Innovation Survey data for Luxembourg, the impact of certification on innovation probability is assessed using a logit model that controls for relevant firms characteristics and market features.

Findings

– The innovation potential of services and small firms is understated when adopting innovation definitions restricted to technological aspects and more formalised innovation activities. ISO 9000 certification may promote innovation when adopting definitions that captures sectoral innovation specificities. In particular, certification increases innovation propensity in manufacturing when the focus is on technological innovation and formalised innovation expenditures. On the contrary, when non-technological aspects are included and allowance is made for wider innovation activities, the impact of certification on services tends to emerge. However, sharper statistical evidence for manufacturing indicates a more important role of certification for innovation success in this sector.

Research limitations/implications

– Case-study research could supplement the findings concerning the relative effectiveness of certification in services and manufacturing. The investigation would also benefit from extensions in the econometric analysis to address comparisons across samples and potential causality issues.

Practical implications

– Findings are interesting to practitioners and registrars in order to identify the specific characteristics of firms for which certification provides higher innovative potential.

Originality/value

– The study highlights the relevance of sectoral specificities and innovation definitions for the debate about the effect of ISO 9000 certification on innovation.

ISO 9001 in health service sector: a review and future research proposal

Purpose

– This paper aims to describe the state-of-the-art in ISO 9001 research in healthcare service sector and propose the future research agenda.

Design/methodology/approach

– A comprehensive literature review of the ISO 9001 studies in healthcare service sector was carried out.

Findings

– The effectiveness of ISO 9001 implementation in healthcare service sector is still not clear. Previous researches show common stages for implementing ISO 9001 in a healthcare service organization. However, there is no previous research that reveals the content of the system implemented. In addition, there is no previous research that reveals the interpretation of ISO 9001 based on the practice of ISO 9001 implementation in an organization. Based on the review, eight future research agendas were proposed.

Originality/value

– The paper is believed to be the first to discuss the state-of-the-art of ISO 9001 researches in healthcare service sector.

Quality management systems development based on a production systems taxonomy

Purpose

– This paper aims to propose a method for the development of quality management systems (QMS) that allows the consultant that undertakes the support of the organisation to take advantage of a corporate memory. The consultant develops a new QMS based on a preliminary draft that is created using suitable reference processes from a library, selected according to the features of the organisation's production system.

Design/methodology/approach

– The method adopts a taxonomy of production systems, based on a set of features (e.g. degree of the products’ customisation, form of purchasing, etc.) and creates a library of reference processes that satisfy the requirements of the standard and are suitable for each particular type of production system.

Findings

– The QMS developed according to the proposed method satisfy both the requirements of the standard ISO 9001 and the needs of the organisation in which the QMS is installed in the biggest possible degree. The duration and cost of the project for the new QMS is reduced and the effort is oriented towards the process adaptation and improvement.

Research limitations/implications

– The proposed approach is general and can be applied to several types of industries. However, the proposed taxonomy is applicable to manufacturing companies. For other types of organisations specific taxonomies should be developed.

Originality/value

– The originality of the paper stems from the development of a QMS based on reference processes rather than the modelling and reviewing of as-is processes.