A Study on the Critical Factors Ok

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International Journal of Production Research,

2006, 131, preview article

A study on the critical factors of ISO 9001:2000 and organizational

performance of Indian manufacturing firms

P. PADMA, L. S. GANESH and C. RAJENDRAN*

Department of Management Studies, Indian Institute of Technology Madras,

Chennai-600036, India

(Revision received April 2006)

This study explores the critical factors of ISO 9001:2000 and investigates the

effect of ISO certification on organizational performance, as perceived by themanagement. In order to gain more insight into the investigation, the study alsoanalyses the relationship between the firm attributes and the critical factors,as well as the relationship between firm attributes and the indicators oforganizational performance.

Keywords: ISO 9001:2000; Quality management system; Critical factors;Indicators of organizational performance; Firm attributes

1. Introduction

The pursuit of quality is one of the most exciting and rewarding endeavours in

todays business. As a result, many organizations have introduced and steadily

improved upon their quality systems, compelled by the demands placed on them by

markets and the nature of competition. Total quality management (TQM) is defined

as both a philosophy and a set of guiding principles that serve as the foundation of a

continuously improving organization. As the origin of quality management had its

roots in the manufacturing industry, the subject of quality management has been

viewed largely from the manufacturing perspective. Several works (e.g. Flynn

et al. 1994, Joseph et al. 1999) have thoroughly investigated various dimensions,

techniques and organizational requirements for effective implementation of TQMin the manufacturing sector.

ISO 9001:2000 is a standard for quality management systems (QMS). QMS based

on ISO 9001:2000 provide a sound foundation on which TQM programmes can be

built. It has been widely acclaimed that ISO 9001:2000 is a first big step in a TQM

programme, as implementing ISO 9001:2000 helps to pave the way for continual

improvement. Mo and Chan (1997) emphasized that small firms need to ascertain the

gap between their current situation and the requirements for success before starting

the QMS certification process, as the implementation requires a more cost-effective

and well-planned approach. Gotzamani and Tsiotras (2001) concurred with

*Corresponding author. Email: [email protected]


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Yung (1997), and suggested that the ISO 9000 could be a good first step towards

TQM. Karaszewski and Karaszewski (2002) studied the implementation of ISO

9001:2000 and TQM in Polish industries in all sectors. Cerio (2003) concluded from a

survey of Spanish firms that there existed a significant relationship between the level

of implementation of quality management practices and improvement in operationalperformance in terms of cost, quality and flexibility. Yeung et al. (2003) found that

the ineffectiveness of ISO 9001:2000 is largely due to incorrect management

objectives and expectations from the standard. Naveh et al. (2004) indicated that

learning is a more important factor in explaining ISO 9000 performance than timing.

They asserted that both the first and second movers achieved a high level of

performance through ISO 9000 certification, provided they had learned from

experience of their own or others. Mahadevappa and Kotreshwar (2004) indicated

that adopting ISO 9000 contributed to better quality performance of the firms,

measured by reduction in defects, rework, customer complaints, etc. Arauz and

Suzuki (2004) found that motivation for certification, implementation process,maintenance activities, and existing quality measures significantly influenced the

performance of ISO 9001:2000 in Japan.

Naveh and Marcus (2005) found that ISO 9000 certification alone did not

provide a competitive edge, and emphasized that the standard should be adhered

to in the firm through an external coordination with suppliers and customers and

integration with existing practices of the company. Morris (2006) found that the link

that existed between ISO 9000 certification and financial performance to be poor in

the electronics industry and the results might be attributed to the nature of the

sample and hypotheses. Swami and Balaji (2006) showed that there is a significant

difference between firms with and without ISO 9000 certification with respect to the

human resources management practices and advanced technology, and that ISO9000 certified firms adopt innovative technologies.

2. Findings from the literature review

There have been various studies relating to the implementation of total quality

management (TQM) and several frameworks leading to TQM. Researches related

to ISO-9000-series quality management system (QMS), and ISO-14000-series

environmental management system (EMS) have been carried out. Many authors

have reported the advantages and demerits of, motivation for, and issues in ISOcertification across the series of standards (Mo and Chan 1997, Gotzamani and

Tsiotras 2001, Pun 2001, Yeung et al. 2003). Studies investigating the relationships

between quality certification and quality management practices, and quality

certification, and financial and operational performance have also been carried out

(see Terziosvski and Samson 1999, Agus et al. 2000, Sureshchandar et al. 2001,

Cerio 2003, Issac et al. 2004). Arauz and Suzuki (2004) studied the factors affecting

the performance of ISO 9000 standard. Naveh and Marcus (2005), and Swami and

Balaji (2006) studied the performance of firms with and without ISO 9000

certification. It appears that the existing works have not explored the critical factors

of the ISO systems and their influence on firm performance. Hence, the current studyfirst explores the key factors of the ISO 9001:2000 series of standards, and then,

the effect of certification on organizational performance.

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3. Research objectives

The objectives of this study are to:

1. Determine the levels of presence of the critical factors (CFs) and indicators of

organizational performance (IOPs) in a sample of ISO 9001:2000 certified

firms in India, and also the changes in the CF and the IOPs levels following

the implementation of the QMS.

2. Examine the effect of implementing ISO 9001:2000 on the CFs and the IOPs.

3. Analyse the relationships between the firm attributes and the CFs, and the

relationships between the firm attributes and the IOPs.

The CFs are essentially input variables that are within the overall control of

the organizations. In contrast, the IOPs can be regarded as output variables that

describe the performance of the firms on various aspects, particularly due to

implementation of QMS. These variables have been selected following the literaturereview and discussions held with executives in the sample firms. To achieve these

objectives a questionnaire survey (presented in the Appendix) was conducted during

20022004 from a sample of ISO 9001:2000 certified firms in India to gather

practitioners perceptions on various aspects of the CFs and organizational

performance. A detailed discussion on the CFs and the IOPs is presented below.

3.1 CFs in the current study

The following are identified as the CFs for the successful implementation of QMS

in the manufacturing industry:

. Top management commitment.

. Customer focus.

. Quality process management.

. Continuous improvement.

. Measurement, monitoring and control.

. Human resources management.

A discussion on these critical factors is now presented.

3.1.1 Top management commitment (TMC). Top Management should establish

unity of purpose and direction of the organization by creating and maintaining an

internal environment in which people can become fully involved in achieving the

organizations objectives. It is emphasized that without the total involvement of top

management, all quality efforts might fail (Ahire 1996, Sureshchandaret al. 2001). In

the ISO 9001:2000, it is stated that management responsibility and commitment are

required to communicate the importance of meeting customer requirements, frame a

quality policy, establish quality objectives, and ensure availability of resources. These

standards consider top management commitment as paramount to the growth of an

organization (Clause 5Management Responsibility, ISO 9001:2000).

3.1.2 Customer focus (CuF). Quality is defined as conformance to customers

requirements. The crux of Demings (1986) 14 points on quality management

Critical factors of ISO 9001:2000 and performance of Indian manufacturers 3


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emphasizes customer satisfaction. The customers perception of quality plays a vital

role in customer satisfaction, which in turn affects quality management (Anderson

et al. 1994). Though not explicit, this element of quality is often referred to in the

ISO 9001:2000 standards (Process approachClause 2.4, ISO 9001:2000).

3.1.3 Quality process management (QPM). Process management ensures that a

process is worked without failure in spite of variations in workforce (Flynn et al.

1994). Smith (1995) explained that understanding, design and control of business

processes would be necessary for business improvement. In service quality,

enhancement of technological capability is very essential in service delivery

(Sureshchandar et al. 2001). ISO 9001:2000 mandates an organization to identify

the processes needed for quality management and their application throughout the

organization. Furthermore, there are many clauses in the ISO 9001:2000 standards

pertaining to process management (viz., documentation requirements4.2, control

of documents4.2.3, design and development7.3). These clauses best describe theessentiality ofQPM.

3.1.4 Continuous improvement (CI). Deming (1986), in his quality philosophy,

reiterated the importance of continuous improvement. Attainment of world-class

goals is only possible by continuous improvement in all aspects of performance

(Spenley 1994). Firms need to focus on their long-term goals by continuously

improving their processes. ISO 9001:2000 emphasizes on continuous improvement of

processes by requiring that management should improve the effectiveness of QMS

through the use of quality policies, quality objectives, audit results, data analysis,

corrective and preventive actions and management review (Clause 8.5.1, ISO9001:2000Continual Improvement).

3.1.5 Measurement, monitoring and control (MMC). Quality cannot be improved

until it is measured. Statistical techniques are an essential component of ISO

9001:2000, which delineates the importance of measuring quality. Ahire (1996)

asserted that translating customer needs into actions requires discreet use of tools

such as quality function deployment (QFD). In his statistical theories of process

variation, Shewart (1931) underscored the importance of methodologically control-

ling organizational processes. Monitoring and measurement form an essential part of

ISO 9001:2000 standards. They require an organization to establish processes for

monitoring the conformity of products to specified requirements, and recommend

the use of statistical techniques to monitor processes (Clause 8Measurement,

Analysis and Improvement, ISO 9001:2000).

3.1.6 Human resources management (HRM). People at all levels in an organization

should be effectively managed in order to build a work environment conducive to

personal and organizational growth, and to utilize their full potential in line with a

firms objectives. Schneider and Bowen (1992) stated that only if employers treat

employees as valuable resources would they in turn treat their customers as valuable.Hence it becomes imperative for firms to consider human resources management

as a source of competitive advantage (Sureshchandar et al. 2001). ISO 9001:2000

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standards state that personnel performing work affecting product quality should

receive adequate training and skills. Other elements of human resources like

communication and work environment are also dealt with appropriately in the

standards (Clause 6.2Human Resources, ISO 9001:2000).

3.2 IOPs identified in the current study

Performance indicators of a firm quantitatively represent various firm-related and

market related aspects of its products, services, resources, and productivity. They

provide data about how well a company performs, potential areas of improvement,

the gap between the firms results and goals, and are used to determine if the

processes are under control and if customers are satisfied. From the literature review,

widely used IOP that satisfy these objectives for ISO 9001:2000 certified firms are

found to be as follows:

. Customer satisfaction.

. Employee morale.

. Growth in exports.

. Profitability.

. Overall productivity.

. Reduction in quality costs.

. Overall financial performance.

. Overall operational performance.

. Competitiveness.

. Sales growth.

. Earnings growth.

. Market share.

3.2.1 Customer satisfaction (CS). The very definition of quality involves exceeding

customers expectations. According to Deming (1986), a firm should not only focus

on do it right first time, but also please its customers, to improve its business

performance. Customer satisfaction has been used as an indicator of both

organizational performance (Terziosvski and Samson 1999) and operational

performance of an organization. Pun (2001) considered customer satisfaction as

a performance indicator of TQM efforts.

3.2.2 Employee morale (EM). An environment conducive to work is essential for

the effectiveness of employees. The work environment influences the employees

abilities to improve the quality of work (Issac et al. 2004). Employees are one of the

important assets of an organization, and their morale and motivation lead to

improved customer focus, resulting in customer satisfaction. This, in turn, leads to an

increase in market share and competitiveness.

3.2.3 Growth in exports (GE). Increase in growth in exports indicates that demandfor the product has increased, across time. It indicates how well an organization

performs compared with the previous years. Terziosvski and Samson (1999) included



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export growth as a measure of organizational performance, particularly in the

context of globalization and international trade.

3.2.4 Profitability (Prf). This indicates the efficiency of a company at generatingearnings. The primary goal of any business firm is to make profit. Hence,

profitability also implies how well a firm performs. Agus et al. (2000) included

profitability as a performance indicator of an organization in their study on TQM.

Pun (2001) also considered profitability as a measure of a firms performance.

3.2.5 Market Share (MS). Market share refers to a firms share of the total sales of

all products within the product category in which the firm competes. It provides

information on whether customers are really satisfied with the products/services of

the firm. Terziovski and Samson (1999) included market share growth to indicate

organizational performance in their study on the relationship between TQM andorganizational performance.

3.2.6 Overall productivity (OP). Productivity indicates if the firm effectively uses

resources to meet its objectives and goals. Terziovski and Samson (1999) included

productivity as an important measure of organizational performance. Pun (2001)

also included overall productivity as a performance indicator of TQM efforts in

his study on TQM in manufacturing and service industries.

3.2.7 Reduction in quality costs (RQC). Cost of quality, as addressed by Taguchi

(1986), is an important measure of organizational performance. It is necessary to

execute cost-effective ways to improve the quality of products/services/processes.

Even though the implementation of TQM programs may increase the cost initially,

the cost of quality is expected to decline due to less defects and rework, in the long

term. Terziovski and Samson (1999) included cost of quality as a measure to

indicate organizational performance.

3.2.8 Overall financial performance (OFP). It gives an indication of a firms

business performance. It provides information about how well an organization meetsits goals, and how effectively it uses resources to achieve an efficient process that

results in good products/services. Agus et al. (2000) considered overall financial

performance as an indicator of organizational performance.

3.2.9 Overall operational performance (OOP). Operational performance is related

to the understanding, optimizing and aligning the operational business activities and

processes to a common set of goals and objectives to improve effectiveness. Overall

operational performance is an indicator of a firms capability to utilize its resources

effectively in order to meet its objectives (both financially and operationally).Terziovski and Samson (1999) considered operational performance as an essential

measure of organizational performance.

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3.2.10 Competitiveness (Cmp). Competitiveness indicates the performance of

firms in external trade markets. The knowledge about competitiveness is used to

benchmark a firms performance against its competitors performance, and

hence, could be used to gauge customer satisfaction. Pun (2001) included

competitiveness as an important measure of organizational performance in thebroader context of TQM.

3.2.11 Sales growth (SG). Sales growth is the average growth rate of sales per

share. While sales figures do not necessarily indicate the performance of a firm, sales

growth indicates to a firm about how well it is doing financially, in spite of changes

in market size or economic conditions. Pun (2001), in a study on TQM adoption in

manufacturing and service industries, considered sales turnover as an indicator of

firm performance. Terziosvski and Samson (1999) also considered sales growth as

an indicator of organizational performance.

3.2.12 Earnings growth (EG). Earnings are total income less total expenses. They

have a very vital role to play in a firms efforts towards development of markets and

only positive earnings growth can stimulate this development. Earnings growth is

an important financial factor that provides perspective on a firms profitability and

shareholder value.

4. The sample and the instrument for ISO 9001:2000

For the sample survey, only those firms that meet the following criteria have beenincluded in the study: the firm should belong to the manufacturing sector, and the

firm should be certified ISO 9001:2000. As there appears to be no prior instrument

for measuring the CFs for ISO 9001:2000 in the manufacturing sector, an instrument

has been developed in the current study (see the Appendix), with a note on the

critical factors (CFs) and the corresponding items. We wish to mention here that this

note was not included in the questionnaire sent to the organizations. The units of

analysis in this study are ISO 9001:2000 certified firms. From the Indian Product

Promotion Centres Directory (IPPC 2002), 120 ISO 9001:2000 certified manufac-

turing firms were randomly chosen and included in the sample. Questionnaires were

mailed to personnel who were responsible for the implementation of QMS in theirrespective organizations. After persistent attempts spanning many months, 37 ISO

9001:2000 certified firms responded. The questionnaire consisted of a General

section to obtain general information about the respondents organizations, and two

sections, section A and section B. The General section contained the queries related

to organization such as number of employees, annual turnover, export orientation,

scope of the firm (e.g. national and international), time taken to install the quality

system, etc. The questions in section A pertained to the respective CFs for fulfilling

ISO 9001:2000 standards. The items belonging to different CFs were jumbled in

order to minimize respondent biases. This section included 75 items indicating the

operating elements. The operating elements were identified from a review ofliterature on quality processes and ISO 9001:2000 standards, discussion with experts

and professionals in the industry. In effect, each CF is a construct with various



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operating elements being the constituents. Section B lists out various indicators of

organizational performance, on the corresponding level and change scales, as

perceived by the management.

In this study, two seven-point scales have been used in the questionnaire against

every item in sections A and B. The choice of the seven-point scale is consistent withthe literature on TQM and ISO systems (e.g. Huarng 1998, Sureshchandar et al.

2001). The first one, ranging from 0 to 6, has been used to indicate the perceived

level of presence of various operating elements of ISO 9001:2000/indicators of

organizational performance. The scale is given below:

As this scale includes the entire range for the level of current presence of an

operating element/an indicator of organizational performance, it is called the

level scale.

The second scale, ranging from 3 to 3 through 0, is used to indicate the extent of

change in an operating element/indicator of organizational performance over a period

of time, due to the implementation of ISO 9001:2000. This scale is given below:

As this scale indicates the extent of change in the operating elements of

ISO 9001:2000/indicators of organizational performance, it is called the change scale.

It is found that all six CFs are necessary for effective implementation of

ISO 9001:2000 standards. However, in some organizations, some CFs were present

even before implementing ISO 9001:2000. Hence, a study of these CFs (through their

constituent operating elements) on the change scale becomes relevant.

5. Categorization of sample attributes

This section deals with the attributes of the sample firms and their categorization.

The attributes are: number of employees or size of the firms, turnover of the firms,

geographic scope of the firms (in terms of location in more than one country), and

export orientation of the firms (in terms of export and non-export of products).

Sample information is given in tables 1 and 2.

Several works (e.g. Ghobadian and Gallear 1997, Ahire and Golhar 1996) on

quality initiatives and quality practices have researched the effect of firm attributes.

As the ISO 9001:2000 registration process proves to be costly, and financial measuressuch as profitability, sales growth, and earnings growth have been included in the

study, it is appropriate to determine if firms in different turnover categories exhibit

0 1 2 3 4 5 6Nil Marginal

presenceModeratepresence

Significantpresence

Highpresence

Very highpresence

Completepresence

3 2 1 0 1 2 3Complete

negativechange

Significant

negativechange

Marginal

negativechange

No change Marginal

positivechange

Significant

positivechange

Complete

positivechange

8 P. Padmaet al.


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significant differences. According to Wilson and Chua (1988), the external efficiency

of a firm can be measured by the net total turnover. International firms, because

of their exposure to international markets, might have more mature quality

methods and systems in place when compared to national firms. Further, it is a

common notion that export-oriented firms perform better when compared to non-export-oriented firms, as they cater to foreign markets. Hence, it is worthwhile to

investigate the differences between international and national firms and also those

between export oriented and non-export oriented firms in terms of QMS

certification. These aspects do not seem to have been addressed in the literature,

and hence this analysis is quite relevant and appropriate.

6. Methodology

After the data have been collected, the instrument is tested for validity,unidimensionality and reliability, and then subjected to various hypothesis tests

to draw interpretations about the population. For establishing face validity, the

questionnaires have been given to three categories of experts, namely academics,

executives and consultants, and they have been requested to scrutinize the

questionnaires and indicate the relevance of each item. The present instrument has

been developed based on a thorough review of conceptual and empirical literature

to ensure content validity.

Measurement theory requires that a set of items that are developed and used for

representing one factor should be statistically uni-dimensional. This refers to the

existence of a single trait/construct underlying a set of measures (Hair et al. 1998).Keeping in mind the available sample, analysis of variance (ANOVA) has been

performed on each set of items to identify the possible significant differences among

Table 2. Categorization of ISO 9001:2000 certified firms with respect toturnover of the firms.

CategoryCriterion of categorization

(rupees in millions)No. of firms

in the sample

Low Turnover5100 10Medium 101Turnover 200 9High Turnover4200 18

Table 1. Categorization of ISO 9001:2000 certified firms with respectto number of employees (size of the firms).

CategoryCriterion of

categorizationNo. of firms

in the sample

Small Number of employees 400 12Medium 401number of employees 800 14Large Number of employees4800 11



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their values. Items exhibiting significant differences from the rest in the sets have

been identified by using post-hoc tests and removed from further analyses. An item

exhibiting a significant difference in either the level scale or the change scale is

removed from both scales to maintain uniformity throughout the instrument. It is

found that only the p-value of TMC is less than 0.05, implying a significantdifference among the items representing it. Hence, a post-hoc test (Bonferroni

method) has been done to identify items having significant differences in both scales,

and they have not been considered for further analyses. Item 8 of TMC and item

11 ofMMC(which are underlined in the Appendix) are found to have a significant

difference, and hence removed from further analyses.

The reliability of an instrument is commonly measured by Cronbachs coefficient

alpha. It was found that after performing unidimensionality test, all the CFs are

found to equal or exceed the desirable value of 0.6. Hence, the scale is reliable.

All the six CFs are found to exhibit validity, unidimensionality and reliability.

Hence, ISO 9001:2000 can be conceptualized using a six dimensional framework witheach CF being a dimension. The standardized instrument can therefore be used to

measure the levels of the CFs for ISO 9001:2000 practices in an organization.

7. Descriptive statistics of the CFs

The descriptive statistics of the CFs for ISO 9001:2000, namely, minimum (Min),

maximum (Max), mean and standard deviation (SD) of the CF scores are presented

on both level (table 3 and figure 1) and change (table 4 and figure 2) scales. Box and

whisker plots are used to indicate the inter-quartile range (IQR), outliers (shownby ) and extreme values (shown by ) for each CF.

7.1 Descriptive statistics of the CFslevel scale

. TMCs mean is relatively higher (4.76), whereas its range value is the lowest,

and its SD is also low. The single outlier does not affect the responses for

TMC. Respondents unanimously agree that TMCis vital for ISO 9001:2000

fulfilment.

. CuFhas the highest mean value (4.82), which implies that CuFis prominent

when compared to other CFs. There were more international firms in the

Table 3. Descriptive statistics of the CFslevel scale.

CFs TMC CuF QPM CI MMC HRM

Mean 4.76 4.82 4.51 4.41 4.49 4.55SD 0.36 0.48 0.34 0.49 0.42 0.42IQR 0.44 0.58 0.40 0.75 0.43 0.29Min 3.67 3.83 3.53 3.33 3.10 3.00Max 5.34 5.83 5.26 5.33 5.00 5.06

Range 1.67 2.00 1.73 2.00 1.90 2.06

CFs, critical factors.

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Table 4. Descriptive statistics of the CFschange scale.

CFs TMC CuF QPM CI MMC HRM

Mean 1.78 1.77 1.63 1.77 1.68 1.68SD 0.40 0.51 0.41 0.48 0.33 0.29IQR 0.56 0.66 0.40 0.58 0.28 0.29Min 1.11 0.50 0.93 0.33 0.86 1.06Max 3.00 3.00 2.93 3.00 3.00 2.41

Range 1.89 2.50 2.00 2.67 2.14 1.35

37HRM

37MMC

37CI

37QPM

37CuF

37TMC

N =

3.5

3.0

2.5

2.0

1.5

1.0

.5

0.0

1

3

222

1

3

2

24

42

34

12

24

2

Figure 2. Box and whisker plots for the CFschange scale.

373737373737N =

HRMMMCCIQPMCuFTMC

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5

1224

9

71

9

79

17

9

Figure 1. Box and whisker plots for the CFslevel scale.



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sample, and usually international firms are known to have separate

departments for customer care.

. QPMhas a relatively low mean value of 4.51. All the surveyed firms have

more or less similar processes to manage and improve quality, and this might

be the reason for this data pattern of low SD and symmetrical IQR.. Though CIdoes not have any outlier, it has the lowest mean value of 4.41

and the highest IQR and SD values. As firms continuously strive to improve

their quality,CIwould not be perceived as having been accomplished totally

at any point of time, leading to the low mean value and relatively higher

data dispersion.

. MMChas a relatively low mean (4.49), relatively high SD and range, which

may be attributed to the outliers and the extreme value in the responses. As

measuring quality requires the use of various statistical tools and techniques

that are either expensive or intricate to use and understand, the firms seem

to struggle in opting for a good measurement tool to manage quality andmonitor their quality processes.

. HRMhas a relatively high mean value (4.55). Although the IQR ofHRMis

the least, it has the highest range value. This is due to the presence of outliers

and extreme values. Hence, we can conclude that firms consider HRM as

relatively important and that a majority of the respondents have similar

perceptions ofHRM.

. It is interesting and important to note that firms consider soft or people

related issues (CuF, TMC, and HRM) and effective leadership as relatively

more important than the methods and procedures (QPM, MMC, and CI)

they follow.

7.2 Descriptive statistics of the CFschange scale

. TMChas the highest mean, a relatively low SD, relatively high IQR, and an

outlier. Hence, we can infer that in spite of variations in the perceptions of

respondents,TMChas undergone maximum change due to the implementa-

tion of ISO 9001:2000.

. CuFhas the second highest mean value of 1.77, the largest SD and the largest

IQR. It has also obtained the second highest mean value. This indicates that

due to the implementation of QMS, organizations have learned that retainingcustomers is most essential, and this in turn becomes a motive for them to

provide more customer focus.

. Besides the presence of outliers and extreme values on the upper side, QPM

has the lowest IQR and the lowest mean value of 1.63. All the firms

experience more or less similar problems to change their processes, despite

the implementation of QMS.

. CIs relatively high mean value of 1.77 indicates that firms have begun to

consider continuous improvement as vital to their presence in the market.

It has a relatively high IQR and SD, which indicates that the perception of

respondents is dispersed widely.. MMC has a relatively low mean value of 1.68 and the lowest IQR value.

Its relatively high range value may be due to the presence of a pair of outliers,

12 P. Padmaet al.


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and an extreme value. Firms find it hard to change their methods and

procedures of measuring quality processes.

. HRMhas a relatively low mean value of 1.68, besides the lowest SD, IQR,

and range values. Hence, we can infer that most firms have not significantly

changed their way of managing people following ISO 9001:2000 certification.

8. Descriptive statistics of the IOPs

The descriptive statistics of the IOP on both level (table 5 and figure 3) and change

(table 6 and figure 4) scales are presented in this section.

8.1 Descriptive statistics of the IOPslevel scale

. CS has the highest mean value of 5.00 and the lowest range. It has the

minimum IQR value along with OP, despite the presence of extreme values.

With ISO 9001:2000 certification, firms give greater importance to customers

and this has led to a higher level of presence ofCS.

. A relatively high level of presence ofEMmight be attributed to the relatively

high level of presence ofHRM.

37

OOP

37

OFP

37

RQC

37

OP

37

MS

37

Prf

37

EG

37

SG

37

Cmp

37

GE

37

EM

37

CS

N =

7

6

5

4

3

2

1

0

-1

17

24

328

24

27

252042

2828273524332429272828

321

47

241

2832

8313537101623618

24

1

1034724

215

46252926281320

Figure 3. Box and whisker plots for the IOPslevel scale.

Table 5. Descriptive statistics of the IOPslevel scale.

IOPs CS EM GE Cmp SG EG Prf MS OP RQC OFP OOP

Mean 5.00 4.46 3.70 4.43 4.16 3.73 3.65 4.32 4.86 4.81 4.14 4.81SD 0.75 1.22 1.35 0.69 0.99 1.50 1.64 0.97 0.98 0.91 1.03 1.00IQR 0.00 1.00 0.50 1.00 1.00 2.00 2.00 1.00 0.00 2.00 1.00 1.00Min 3.00 0.00 0.00 3.00 0.00 0.00 0.00 0.00 0.00 3.00 0.00 1.00Max 6.00 6.00 5.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00Range 3.00 6.00 5.00 3.00 6.00 6.00 6.00 6.00 6.00 3.00 6.00 5.00

IOP, indicators of organizational performance.



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. GEhas a relatively very low mean value of 3.70 because most of the surveyed

firms are already export-oriented.. Cmp has a relatively high mean value of 4.43 due to the high levels of

presence ofCSandEM. The lowest SD value of Cmp may be attributed to

medium-sized firms, which are the largest in number in their category, giving

rise to the lowest overall SD value for Cmp.

. The relatively higher mean value of 4.16 ofSG is so because of higher focus

on customers. SG has the highest range value, which might be due to the

presence of an extreme value.

. EG has high mean value of 3.73. It has the maximum IQR, along with Prf

andRQC. From this, it is evident that the perceptions of respondents about

EGdiffer widely. Its maximum range value may be attributed to the presenceof an outlier.

. Prf has the lowest mean value among the IOPs. Further, it has the highest

SD, range and IQR. This is so because in the short run the firms take quality

initiatives to improve quality and not to increase their profitability.

. MS has a relatively moderate mean value of 4.32 and the maximum range

value. This is so because firms may realize the fruits of their quality initiatives

after a much longer duration.

. OPhas a relatively high mean value of 4.86 and the lowest IQR. As the firms

begin to use their human resources (indicated by a high EMvalue), it is quite

natural that they become highly productive.. RQC has a relatively high mean value of 4.81 and a low range value.

Since firms experience more productivity, they simultaneously learn to utilize

Table 6. Descriptive statistics of the IOPschange scale.

IOPs CS EM GE Cmp SG EG Prf MS OP RQC OFP OOP

Mean 1.97 1.95 0.95 1.32 1.54 1.27 0.92 1.43 1.89 2.00 1.35 1.84SD 0.64 0.78 0.78 0.85 0.99 0.87 0.92 0.73 0.88 0.88 0.75 0.69IQR 0.00 1.50 1.00 1.00 1.00 1.00 2.00 1.00 2.00 2.00 1.00 1.00Min 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.00 0.00 0.00 1.00Max 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 0.00 3.00 3.00 3.00Range 2.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 2.00

37

OOP

37

OFP

37

RQC

37

OP

37

MS

37

Prf

37

EG

37

SG

37

CmP

37

GE

37

EM

37

CS

N =

3.5

3.0

2.5

2.0

1.5

1.0

.5

0.0

-.5

2

1815353417283110

32022613429

Figure 4. Box and whisker plots for the IOPschange scale.

14 P. Padmaet al.


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and manage their resources effectively and efficiently resulting in cost

reduction.

. OFPhas a relatively lower mean value of 4.14 and the highest range as firms

experience less financial gains due to quality initiatives in the short run.

. OOP has a relatively high mean and range. Once firms become productiveand learn to utilize their resources efficiently, they display better operational

performance.

8.2 Descriptive statistics of the IOPschange scale

. CS has a relatively high mean value of 1.97, the minimum SD, IQR

and range values, despite the presence of extreme values. As the purpose of

QMS is to enhance customer satisfaction by meeting customer requirements,

it is natural for the firms to experience an increase in CS due to thecertification.

. EMhas a relatively high mean value of 1.95 and a very high IQR. This is so

because organizations become more and more focused towards both internal

and external customers, resulting in larger changes in CSand EMafter the

certification.

. GEhas the lowest mean value of 0.95 and a high IQR. The respondents have

widely differing perceptions about GE. Further, not all the firms are export

oriented, which could be the reason for the smaller changes observed in GE.

. Cmps mean value of 1.32 indicates that firms do not experience a significant

change in competitiveness because CP depends not only on the positions ofthe firms but also on those of their competitors.

. SGandEGhave relatively low mean values and high SD values. From this, it

appears that due to ISO 9001:2000 certification, the financial indicators of

firms do not undergo rapid changes.

. Prfhas a relatively low mean value of 0.92 and the maximum IQR value,

along with OP and RQC. Though the perceptions of respondents are

dispersed, they opine that like other financial measures, profitability too does

not change significantly due to the certification process.

. The low mean value, 1.43 of MS, indicates that firms need a longer time

period to experience a greater change.. OPhas a higher mean value of 1.89 and high IQR, which imply that there is

an increase in overall productivity due to the ISO 9001:2000 certification,

though the perceptions of respondents vary widely. This increase can be

attributed to the increase in CSand EM.

. RQChas the highest mean value of 2.00, which indicates that firms enjoy

greater reduction in costs due to the certification process. This reduction in

costs is due to the effective utilization of resources as indicated by higher

mean value ofOP.

. OFPs mean value is understandably low because of the longer time needed

for firms to experience financial gains.. OOPhas a relatively high mean value (of 1.84) that can be attributed to the

larger change in RQC and OP.



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9. Effect of implementation of ISO 9001:2000 on the CFs and IOPs

This analysis is done to determine if the implementation of ISO 9001:2000 has

desirable effects on the CFs and IOPs of ISO 9001:2000 certified firms, i.e. to find

out if ISO 9001:2000 implementation has a significant positive influence on therespective CFs and IOPs. The following hypotheses have been framed and tested,

with reference to each CF and IOPs.

H0.1: There is no significant change in the CFs due to the implementation

of ISO 9001:2000.

H0.2: There is no significant change in the IOPs due to the implementation

of ISO 9001:2000.

For testing these hypotheses, the t-test is used. The mean value of extent of

change in each CF and IOP, measured on the change scale, is compared with the test

value of 0, which indicates that there is no significant difference due toimplementation of ISO 9001:2000. From tables 7 and 8, it is seen that there is a

significant change (indicated by **) in each CF and IOP. Further, the mean values

are all positive, implying an improvement in all the CFs and IOPs after implementing

Table 7. Results of one samplet-test for H0.1.

CFs MeanStandarddeviation t value p value

TMC 1.78 0.40 26.54 0.00

CuF 1.63 0.51 23.82 0.00

QPM 1.67 0.41 34.89 0.00

CI 1.77 0.48 20.87 0.00

MMC 1.65 0.33 20.68 0.00

HRM 1.67 0.29 30.26 0.00

Table 8. Results of one samplet-test for H0.2.

IOPs MeanStandarddeviation t value p value

CS 1.97 0.64 18.61 0.00

EM 1.94 0.78 15.17 0.00

GE 0.94 0.78 7.37 0.00

Cmp 1.32 0.85 9.45 0.00

SG 1.54 0.99 9.47 0.00

EG 1.27 0.87 8.87 0.00

Prf 0.91 0.92 6.04 0.00

MS 1.43 0.73 11.96 0.00

OP 1.89 0.88 13.15 0.00

RQC 2.00 0.88 13.79 0.00

OFP 1.35 0.75 10.91 0.00

OOP 1.83 0.69 16.25 0.00

16 P. Padmaet al.


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ISO 9001:2000. Therefore, manufacturing firms can justify going in for the ISO

9001:2000 certification.

10. Levels of and changes in CFs (in relation to firm attributes)

10.1 Levels of and changes in CFs (in relation to size of the firms)

From table 9a, it is observed that small size firms do not have the highest mean and

the lowest SD values for any CF. Medium-sized firms have the highest mean and the

lowest SD values for all the CFs, except TMC, for which the second highest mean

value and the lowest SD are observed. Large firms have the highest mean value for

TMC. Small firms, though certified, might not have the necessary systems in place

due to lack of human resources. Further, medium-sized firms cater to large firms and

are under greater pressure to strictly comply with the ISO 9001:2000 requirements.

Meanwhile, large firms already have a huge and diverse market, and the certification

serves only to sustain their current market position. So, it is evident that large firms

do not always perform better (see Ahire and Golhar 1996 for similar results). From

table 9b, it is seen that small firms have the highest mean for QPM. Medium firms

have the highest mean values for CuFand CI. Large firms experience the maximum

Table 9a. Levels of CFs (in relation to size of the firms).

Size of the firms

Small Medium Large

CFs Mean SD Mean SD Mean SD

TMC 4.77 0.38 4.78 0.46 4.79 0.46CuF 4.74 0.50 5.00 0.52 4.83 0.52QPM 4.45 0.34 4.53 0.43 4.52 0.43CI 4.39 0.54 4.58 0.54 4.57 0.54MMC 4.44 0.46 4.61 0.57 4.54 0.57HRM 4.50 0.46 4.65 0.65 4.52 0.65

Table 9b. Changes in CFs (in relation to size of the firms).

Size of the firms

Small Medium Large





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change in TMC, MMCand HRM. Due to certification, large firms assign greater

importance to committed leadership, measurement of current processes, and

managing human resources for creating a quality conscious environment. Medium

firms have realized the importance of customer focus and continuous improvement

after certification, and small firms, due to the lack of adequate human resources,focus more on methods and procedures.

10.2 Levels of and changes in CFs (in relation to turnover of the firms)

From table 10a, it is seen that firms with low turnover have the highest mean and the

lowest SD for QPM. Firms with medium turnover have the greatest mean and

the lowest SD values for all the other CFs. Firms with high turnover do not have the

highest mean and the lowest SD for any CF. Firms with low turnover follow set

standards and procedures to improve quality, but unlike medium and high turnover

firms, they do not have lavish resources for making improvements and innovations.

Hence, they have a low mean value for CI. Meanwhile, medium firms, despite their

turnover not being very high, plan and allocate their resources in order to have

efficient processes and continuously engage themselves in researching for improving

their processes. As firms with high turnover go in for certification to sustain their

Table 10a. Levels of CFs (in relation to turnover of the firms).

Turnover of the firms

Low Medium High



Table 10b. Changes in CFs (in relation to turnover of the firms).


Low Medium High



18 P. Padmaet al.


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market, it is not imperative for these firms to improve their actual systems and

processes. From table 10b, it is observed that firms with low and medium turnovers

do not have the highest mean values for any CF. Firms with high turnover have

experienced the highest changes for all the CFs. This is so because as the firms go in

for certification, they allocate more funds in order to realize the fruits of their effortsto improve quality.

10.3 Levels of and changes in CFs (in relation to export orientation of the firms)

Table 11 shows that, for the level scale, non-export-oriented firms have higher mean

values for all the CFs, except for TMCfor which export oriented firms have higher

mean value. This is so because for non-export-oriented firms the pressure comes

directly from the local market, which makes it imperative for the firms to establish a

good QMS. Further, non-export-oriented firms have lower SD for all the CFs, which

show that respondents have similar perceptions about the levels of presence of CFsin these firms. These observations are in conflict with those made by Taylor (1996).

It is observed from the change scale that non-export-oriented firms have experienced

higher changes forMMCand HRM, and export-oriented firms have higher changes

for all the other CFs.

10.4 Levels of and changes in CFs (in relation to number of years with

QMS certification)

From table 12, for level scale, it is seen that less experienced firms have higher mean

and lower SD values with respect to TMC, QPM, CI and MMC, whereas moreexperienced firms have higher mean and lower SD values for CuFand HRM. This

is due to the fact that while more experienced firms continue to give importance to

people-related (soft) issues, they gradually lose their drive to improve quality (see

Agus and Abdullah 2000 for contradictory results). On the contrary, less experienced

firms commit themselves to continuously improve quality for better organizational

performance. This is further reinforced by higher changes for all their CFs. Hence,

we can conclude that these firms which sustain their initial drive and enthusiasm

become more and more focused towards establishing a QMS in place. Meanwhile,

for more experienced firms which standardize their processes in the course of time,

Table 11. Levels of and changes in CFs (in relation to export orientation of the firms).

Level scale Change scale

Non-export oriented Export oriented Non-export oriented Export oriented

CFs Mean SD Mean SD Mean SD Mean SD

TMC 4.72 0.28 4.77 0.38 1.65 0.29 1.82 0.43CuF 5.07 0.34 4.74 0.50 1.67 0.32 1.80 0.56QPM 4.71 0.27 4.45 0.34 1.61 0.37 1.64 0.44CI 4.55 0.33 4.39 0.54 1.53 0.38 1.69 0.51MMC 4.64 0.17 4.44 0.46 1.69 0.28 1.67 0.36HRM 4.69 0.21 4.50 0.46 1.71 0.26 1.67 0.30



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there is less chance for variation in the perception of respondents about the change in

CFs.

10.5 Levels of and changes in CFs (in relation to geographic scope of the firms)

It is evident from table 13 that national firms have higher mean values for QPMand

MMC, whereas international companies have higher mean values for TMC, CuF,

CI and HRM. National firms have stringent quality processes in place that are

measured and monitored regularly in order to improve their quality and hence catch

up with the international firms. Being exposed to international markets, it is

common for international firms to have a separate department to manage human

resources. The lower SD values exhibited by national firms for TMC, QPM and

MMCand international firms forCuF,CIandHRMshow the similar perceptions of

respondents. It is also observed that national firms are found to have higher changesfor all the CFs. This is so because they experience a greater market pressure and

hence they attempt to catch up with their international counterparts.

Table 12. Levels of and changes in CFs (in relation to number ofyears with certification).


52 years 2 years 52 years 2 years


TMC 4.90 0.32 4.73 0.36 1.92 0.60 1.74 0.36CuF 4.82 0.55 4.82 0.48 1.94 0.58 1.73 0.50QPM 4.57 0.22 4.50 0.36 1.82 0.55 1.60 0.38CI 4.50 0.60 4.40 0.48 1.86 0.64 1.61 0.45MMC 4.59 0.40 4.47 0.42 1.94 0.53 1.62 0.27HRM 4.50 0.46 4.56 0.42 1.69 0.37 1.67 0.28

Table 13. Levels of and changes in CFs (in relation to geographicscope of the firms).


National International National International


TMC 4.71 0.33 4.77 0.37 1.92 0.52 1.74 0.38CuF 4.52 0.56 4.89 0.45 1.85 0.56 1.75 0.51

QPM 4.58 0.19 4.49 0.37 1.78 0.57 1.60 0.37CI 4.19 0.57 4.47 0.47 1.71 0.66 1.64 0.45MMC 4.54 0.41 4.48 0.43 1.93 0.48 1.62 0.27HRM 4.50 0.43 4.56 0.43 1.77 0.37 1.65 0.27

20 P. Padmaet al.


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11. Levels of and changes in IOPs (in relation to firm attributes)

11.1 Levels of and changes in IOPs (in relation to size of the firms)

It is observed from table 14a that small size firms have the highest mean values for

Cmp,SG, EG, Prf,MSand OP. Medium-sized firms have the highest mean and the

lowest SD values forCS,EM,OFPandOOP. They also have the highest mean value

for RQC. As these firms have the highest level of presence of CuF and HRM (see

table 9a), they can be expected to exhibit the highest level of presence ofCSand EM

respectively. They also have the highest mean values for QPM,CIand MMC, which

could have led to highest reduction in quality costs, and therefore the highest OOP,

which in turn leads to better financial performance. Large size firms have the highest

mean value of GE as the QMS certification of these firms improves their

international market image leading to improved export performance. Table 14b

shows that small size firms have the highest change values for Cmp, EG, Prf, MS,

OFP and OOP. Most of these firms, in spite of the availability of limited humanresources, are more experienced. Further, they have the highest change forQPM(see

table 9b). All these explain their improved market and internal performance.

Medium-sized firms have experienced the maximum change in CS, EM, and OP.

This is due to the higher change in CuFand CI. Large size firms have the highest

mean values for GE, SG, and RQC. These firms already have a huge and varied

market, and experience an increase in their exports and sales due to their greater

focus towards TMC, MMC, and HRM. This also has led to a decrease in their

quality costs.

11.2 Levels of and changes in IOPs (in relation to turnover of the firms)

From table 15a, it is seen that firms with low turnover have the highest mean and the

lowest SD values for GE, SG and EG. This is because these firms manage their

Table 14a. Levels of IOPs (in relation to size of the firms).

Size of the firms

Small Medium Large

IOPs Mean SD Mean SD Mean SD

CS 4.58 0.90 5.36 0.50 5.00 0.63EM 4.00 1.48 5.00 0.78 4.27 1.19GE 3.83 1.19 3.43 1.55 3.91 1.30Cmp 4.58 0.67 4.50 0.52 4.18 0.87SG 4.42 0.79 3.86 1.29 4.27 0.65EG 4.08 1.00 3.57 1.60 3.55 1.86Prf 4.25 1.06 3.29 1.86 3.45 1.81MS 4.75 0.62 3.86 1.29 4.45 0.52OP 5.08 0.51 4.64 1.39 4.91 0.70RQC 4.50 1.09 5.21 0.80 4.64 0.67OFP 4.25 0.97 4.36 0.63 3.73 1.42OOP 4.83 0.94 5.00 0.55 4.55 1.44



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quality processes in the best possible way (see table 10a). Firms with medium

turnover have the highest mean and lowest SD values forCS,EM,Cmp,RQC,OFP,

OOP. As the firms with medium turnover have better resources available and

continuously strive to improve their existing processes, it is apparent that they

display the best internal performance (indicated by higher means ofRQC, OFP and

OOP). They also have the highest level of presence ofCuFand HRM, which providereasons for the presence of the highest level ofCSandEM. Firms with high turnover

have the highest mean and lowest SD values for Prf and MS. It is possible that these

Table 14b. Changes in IOPs (in relation to size of the firms).

Size of the firms

Small Medium Large


CS 1.97 0.92 2.07 0.62 1.91 0.70EM 2.00 0.74 2.14 0.66 1.64 0.92GE 1.08 0.90 0.57 0.65 1.27 0.65Cmp 1.42 1.00 1.21 0.80 1.36 0.81SG 1.42 0.90 1.43 0.94 1.82 1.17EG 1.50 0.80 1.14 0.86 1.18 0.98Prf 1.08 0.90 0.93 1.07 0.73 0.79MS 1.67 0.78 1.36 0.84 1.27 0.47OP 1.92 0.79 2.00 0.96 1.73 0.90RQC 2.08 0.90 1.71 0.83 2.27 0.90

OFP 1.50 0.80 1.43 0.76 1.09 0.70OOP 1.92 0.67 1.71 0.73 1.91 0.70

Table 15a. Levels of IOPs (in relation to turnover of the firms).


Low Medium High


CS 4.80 0.79 5.44 0.53 4.89 0.76EM 4.20 1.69 5.00 0.71 4.33 1.08GE 4.00 1.15 3.67 1.50 3.56 1.42Cmp 4.40 0.70 4.56 0.53 4.39 0.78SG 4.30 0.67 4.11 1.62 4.11 0.76EG 4.10 0.74 3.44 2.07 3.67 1.53Prf 3.90 1.52 2.67 2.06 4.00 1.33MS 4.40 0.70 3.89 1.54 4.50 0.71OP 5.00 0.47 4.56 1.74 4.94 0.64RQC 4.70 1.06 5.11 0.78 4.72 0.89OFP 4.20 0.79 4.33 0.50 4.00 1.33

OOP 4.80 0.79 5.00 0.50 4.72 1.27

22 P. Padmaet al.


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firms utilize their certification only to consolidate their market, as they already might

have a large and varied market. From table 15b, for change scale, it is seen that firms

with low turnover have the highest mean and lowest SD values for GE. This shows

that though these firms have relatively less financial resources, they experience the

greatest increase in exports due to certification. Firms with medium turnover have

the highest mean and lowest SD values forEMandRQC. Respondents unanimously

feel that these firms, which did not have proper focus on soft issues prior to

certification, understand their importance and start managing people in much more

effective ways (indicated by better EM value). Firms with high turnover show the

highest mean values for CS, Cmp, SG, EG, Prf, MS, OP, OFP, and OOP. These

firms experience an increase in all the CFs (see table 10b) due to which they undergo

higher changes in market performance and internal performance.

11.3 Levels of and changes in IOPs (in relation to export orientation of the firms)

From table 16, it is seen that non-export oriented firms have a higher mean value for

EM, Cmp, SG, MS, OFPand OOP. They have lower SD values for all these IOPs

except SG. This indicates that non-export oriented firms are directly under the

pressure of local market demands. These results are in agreement with those

obtained for the CFs (see table 11). Export oriented firms have higher mean values

forCS, Prf, OP, and RQC, because they have a highly committed top management

and more efficient leadership to guide them through their quality journey. It is also

seen that in the change scale, non-export oriented firms have higher mean values

for SG, EG, Prf, MS, OP, OFP, and OOP. It can be attributed to higher changes

they have undergone in MMCand HRM(see table 11). Export oriented firms havehigher mean values for CS, EM, Cmp, and RQC. This is due to the increase in all

the CFs except MMC and HRM.

Table 15b. Changes in IOPs (in relation to turnover of the firms).


Low Medium High


CS 1.80 0.63 2.00 0.71 2.06 0.61EM 1.90 0.74 2.00 0.71 1.94 0.87GE 1.00 0.67 0.78 0.83 1.00 0.84Cmp 1.30 0.82 1.00 0.71 1.50 0.92SG 1.50 0.71 1.56 1.13 1.56 1.10EG 1.30 0.67 1.00 0.71 1.39 1.04Prf 1.00 0.82 0.44 0.73 1.11 1.02MS 1.40 0.84 1.33 0.71 1.50 0.71OP 1.70 0.48 2.22 1.09 1.83 0.92RQC 1.70 0.67 2.11 0.60 2.11 1.08

OFP 1.40 0.70 1.00 0.00 1.50 0.92OOP 1.60 0.70 1.78 0.67 2.00 0.69



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11.4 Levels of and changes in IOPs (in relation to number of years with

QMS certification)

It is observed from table 17 that less experienced firms have higher mean and lower

SD values for CS, SG, MS, and RQC. This may be attributed to the higher mean

values ofTMC, QPM, CIand MMCthey exhibit (see table 12). More experienced

firms have higher mean values for EM, Cmp, OP, and OFP. In the course of time,

these firms learn to cater to varied markets and hence, they have higher levels ofpresence of these IOPs. Further, they have higher mean values for CuFand HRM,

which lead to higher mean value of EM. Both the type of firms have the same mean

Table 16. Levels of and changes in IOPs (in relation to export orientation of the firms).


Non-export oriented Export oriented Non-export oriented Export oriented

IOPs Mean SD Mean SD Mean SD Mean SD

CS 4.67 0.71 5.11 0.74 1.67 0.71 2.07 0.60EM 4.67 1.00 4.39 1.29 1.67 0.71 2.04 0.79Cmp 4.67 0.50 4.00 1.05 1.22 0.97 1.36 0.83SG 4.00 1.66 3.64 1.47 1.89 1.05 1.43 0.96EG 3.11 1.83 3.82 1.56 1.56 0.88 1.18 0.86Prf 4.56 0.53 4.25 1.08 1.22 0.97 0.82 0.90MS 4.44 1.67 5.00 0.61 1.78 0.67 1.32 0.72OP 4.56 0.53 4.89 0.99 1.89 1.05 1.89 0.83RQC 4.33 0.50 4.07 1.15 1.89 0.60 2.04 0.96OFP 5.00 0.71 4.75 1.08 1.56 0.88 1.29 0.71

OOP 4.67 0.71 5.11 0.74 2.11 0.78 1.75 0.65

Table 17. Levels of and changes in IOPs (in relation to number of years with certification).


52 years 2 years 52 years 2 years

IOPs Mean SD Mean SD Mean SD Mean SD

CS 5.03 0.66 4.83 1.17 1.67 0.82 2.03 0.60EM 4.35 1.25 5.00 0.89 2.17 0.75 1.90 0.79GE 3.68 1.25 3.83 1.94 1.00 1.10 0.94 0.73Cmp 4.42 0.72 4.50 0.55 1.50 1.05 1.29 0.82SG 4.23 0.67 3.83 2.04 1.83 0.98 1.48 1.00EG 3.71 1.42 3.83 2.04 1.50 1.05 1.23 0.84Prf 3.61 1.58 3.83 2.04 1.50 1.05 0.81 0.87MS 4.39 0.62 4.00 2.10 1.67 1.21 1.39 0.62OP 4.81 1.05 5.17 0.41 2.00 0.63 1.87 0.92RQC 4.94 0.93 4.17 0.41 1.67 1.03 2.06 0.85OFP 4.06 1.06 4.50 0.84 1.33 1.03 1.35 0.71OOP 5.00 0.89 5.00 0.85 1.83 0.75 1.84 0.69

24 P. Padmaet al.


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changes in GE, Cmp, SG, EG, Prf, MS, OP, and OOP. This is due to the increase

in all the CFs that these firms experienced during the certification process.

12. Summary and conclusions

The worldwide quality revolution has spurred a lot of research in quality

management. This study has dealt with some aspects of the implementation of

ISO 9001:2000 in Indian manufacturing firms. A questionnaire has been developed

to analyse ISO 9000 implementation and validated. Some of the major findings

of the study are summarized as follows.

. Indian manufacturing firms consider soft issues (such as TMC, CuF, and

HRM) and effective leadership as relatively more important than the

methods and procedures they follow.

. Firms find it hard to change their methods and processes to improve quality,but have begun to realize the importance ofCI.

. Firms experience higher reduction in quality related costs, which might be

due to the effective utilization of resources, as indicated by improved

operational performance.

. It is evident that there is a significant change in all CFs and IOPs, which

shows that manufacturing firms are justified in going in for ISO 9001:2000

certification.

. On the contrary to normal expectations, non-export oriented firms exhibited

higher levels of all the CFs (except TMC) due to the pressure they face in the

local market.. Medium-sized firms, as they cater to large firms, are under pressure to strictly

comply with the ISO 9001:2000 requirements.

. High turnover firms experienced the highest changes in all the CFs as they

realize the importance of allocating more funds for their quality improve-

ment efforts to be fruitful.

. Less experienced firms sustain their enthusiasm and drive to improve their

quality processes, and hence exhibit higher changes in market performance.

. National firms show better market performance and internal performance

than the international firms. Since these firms need to concentrate on

relatively smaller markets they can better manage market performance.Despite these findings, the study has some limitations. The sample size was

restricted to 37 due to operational constraints and instead of confirmatory factor

analysis, analysis of variance was done to establish unidimensionality. Further, the

data was not collected from non-certified firms. Hence, future research may attempt

to replicate the current one with much larger sample, including non-certified firms,

and employing confirmatory factor analysis for ensuring unidimensionality.

Acknowledgement

The authors are thankful to the referee for the suggestions and comments to improve

the earlier version of the paper.

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Appendix

Section A: critical factors of ISO 9001:2000

Note: in the actual questionnaire, the items were jumbled and the respondents wererequested to respond on both the level scale (0 to 6) and change scale (3 to 3).

Top management commitment (TMC)

. Top management emphasis on quality policy and quality objectives.

. Customer focus nurtured by the top management.

. Extent to which necessary resources are allocated and made available by top

management for the implementation of quality policy.

. Top management emphasis on continuous review and improvement in

quality management system.

. Top management emphasis on education, training and development of

human resource in the organization for an effective quality management

system.

. Assumption of responsibility for quality by top management.

. Top management emphasis on quality rather than cost.

. Review of quality objectives and targets with respect to intensity of review.

. Review of quality objectives and targets with respect to frequency of review.

Customer focus (CuF)

. Extent to which the needs and expectations of customers are assessed

periodically for an effective QMS.

. Presence of documentation in conformity to customers requirements.

. Extent to which the concept of internal customer is understood in the

organisation.

. Understanding and dissemination of customers requirements throughout the

organisation.

. Extent to which external customers complaints are effectively resolved.

. Extent to which the quality management personnel are made aware of the

need for customer focus.

. Degree to which effective ways of communicating with customers are

determined and practised.

Quality process management (QPM)

. Continuous assessment of processes necessary to attain the quality objectives.

. Development of methods and measurements to determine the effectiveness of

various processes in the organisation.

.

Appropriate definition of processes necessary for product realisation.. Extent to which internal quality audits are made use of for better process

management.



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. Effective use of quality manuals.

. Presence of records that provide objective evidence of organizational

activities and their results.

. Implementation and maintenance of procedures to be followed in various

processes.. Dependability and reliability of processes.

. Emphasis given to the elimination of defects and reworks.

. Integration of suppliers and vendors into the operations in the organization.

. Practice of preventive/predictive maintenance in the organisation.

. Involvement of supplier in the product development process.

. Practice of total productive maintenance in the organization.

. Process automation in the organization.

. Extent to which quality is built in right at the design stage of new products.

Continuous improvement (CI)

. Effectiveness of continuous improvement processes.

. Use of methods and measurements for continuous improvement of processes.

. Level of continuous assessment of the QMS.

. Extent to which organization feels that continuous improvement results in

competitive advantage.

. Emphasis of continuous improvement in all operations and at all levels.

. Extent to which corrective actions with respect to non-conformity are taken

immediately and effectively.

. Degree to which processes and procedures are foolproof.

Measurement, monitoring and control (MMC)

. Maintenance of documentation for repeatability and traceability.

. Extent to which internal audits are conducted at planned intervals.

. Extent to which data and statistical techniques are used for promoting

continuous improvement.

. Monitoring and control of quality processes by the top management.

. Identification and control of non-conforming products from their unin-

tended use or delivery.. Actions appropriate to non-conformity taken when the non-conforming

product is identified after delivery or use.

. Collection of data with respect to the cause of variation between the desired

and actual out comes in various processes.

. Prevention of non-conformities.

. Extent to which corrective actions with respect to non-conformity are taken

immediately and effectively.

. Prevalence of bench marking in the organisation.

. Assessment and use of penalty costs of non-conformance for an effective

quality management system.. Use of statistical and quality control techniques for evaluating production/

service processes.

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. Extent to which data and statistical techniques are collected and used for

assessing the strengths and weaknesses of quality management system.

. Extent to which the purchased product conforms to specified purchase

requirements.

. Use of data and statistical techniques for analysis of defects and reworks.

. Use of data and statistical techniques for analysing the non-conformity to

product specifications and quality procedures.

. Extent to which quality data and control charts are used at the workplace.

. Use of various methodologies to improve the formulation of quality

strategy.

. Extent to which design, development, verification and validation of quality

processes (and products) are carried out.

Human resources management (HRM)

. Determination of work requirements for implementing QMS effectively.

. Assignment of responsibility to the quality management personnel in the

organization.

. Extent to which physical and ergonomic factors are given consideration to

provide congenial atmosphere to the QMS personnel.

. Extent to which the personnel are periodically trained in the implementation

of QMS.

. Extent to which the skills and expertise of employees are enhanced.

. Extent to which the drive for quality processes and improvement overrides

(or dominates) the need for obtaining immediate results.. Extent to which the quality management personnel are provided with

facilities and supervisory support.

. Extent to which supervisory behaviour influences the productivity of the

organisation.

. Positive attitude of work force towards QMS.

. Motivation of employee for the implementation of QMS.

. Extent to which job enrichment of quality management personnel is

prevalent in the organisation.

. Prevalence of top-down and bottom-up communication processes among

quality management personnel.. Clarity of work or process instruction given to employees.

. Degree to which quality management personnel are trained to be conscious

of human relations.

. Support and encouragement provided to quality management personnel to

solve problems.

. Extent to which quality management personnel are protected and advised in

the event of their inadvertent and unforeseen failures while pursuing ISO

standards.

. Extent to which data related to quality are available to employees.

.

Training provided to supervisors and managers in statistical techniques.. Extent to which team spirit dominates individual preferences and

projections.



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Section B: indicators of organizational performance

. Customer satisfaction

. Growth in exports

. Sales growth

. Profitability

. Overall productivity

. Overall financial performance

. Employee morale

. Competitiveness

. Earnings growth

. Market share

. Reduction in quality costs

. Overall operational performance

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