ISO Certification

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Does it really result in organizational performance improvement?

by Andrew Milivojevich

Since 1987, the ISO 9000 quality assurance standard has been embraced by many countries. So much so, that by 2007 close to one million companies around the world were certified. Between 2005 and 2007 certifications increased by 25 per cent.

What explains this growth in certifications? Much of it has to do with the fact that many OEMS now demand that suppliers have ISO before they’ll do business with them. In many instances, it’s the only way to access certain markets. For export companies, tenders often require companies hold ISO certification.

Prior to ISO 9000, organizations were required to meet specific standards development by OEM’s and/or a particular jurisdiction. Having one standard eliminates the burden of certifying to a number of standards. As such, ISO 9000 supports international trade, as it can reduce obstacles once ruled by those regional standards that often became a barrier to conducting business. Secondly, knowing everyone is certified to the same standard assures confidence and  helps foster business relationships between unfamiliar organizations.

Is ISO effective?

Recently, a Quebec study examined organizational performance and internal barriers to the effectiveness of ISO implementation. At the time of the study, all ISO 9000 certified companies in Quebec where asked to participate. Of these companies, 872 companies participated. A summary of the results is shown in table 1.

Only 26.6 per cent of the company’s surveyed demonstrated high performance outcomes and low barriers to resistance versus ISO 9000 implementation. These organizations did not experience problems implementing the standard.

However, 28.1 per cent demonstrated low performance outcomes along with low level resistance to ISO 9000 adoption. These companies did not experience barriers to ISO implementation. It appears these companies pursued ISO adoption for the purposes of gaining legitimacy rather than trying to improve organizational performance. As such, the quest for legitimacy often leads to bureaucratic systems that reduce efficiencies; hence why these companies had low performance outcomes.

Alternatively, high performance outcomes were observed in 17.9 per cent of companies that experienced high levels of resistance to ISO implementation. While the pressures may be working against the adoption of the standard, the underlying need to overcome these pressures eventually resulted in high performance outcomes.

Finally, 27.4 per cent experienced low performance outcomes along with high levels of resistance to ISO adoption. These organizations often face ongoing problems and are pressured into adopting the standard for reasons that may be beyond their control. In these cases, the adoption of the standard may become progressively difficult if internal problems are significant enough to cause barriers to its adoption.

The results of this study suggest the adoption of ISO 9000 and the potential organizational performance benefits such as quality improvement, cost reduction, and commercial benefit must be weighed against barriers to resistance. Companies must look at organizational performance in a broader context that takes into consideration the overall problems faced by the organization and how it might become a barrier to ISO implementation.

When deciding whether or not to pursue ISO 9000, businesses must consider how implementing the standard will impact the organization. ISO 9000 adoption leads to dditional workloads and can add additional priorities that can lead to poor employee participation and undermine the implementation of the system.

So while there are studies that suggestion the adoption of ISO 9000 does not lead to improved levels of organizational performance and others that suggest it does, I believe the real answer depends on whether or not the organization is stable enough to embrace it.

Andrew Milivojevich is president of The Knowledge Management Group and SRED-iQ.Net a source for information on Scientific Research and Experimental Development (SRED).

Reference:Paradoxes of ISO 9000 Performance: A Configurational Approach, Olivier Boiral and Nabil Amara Université Laval , Québec, Canada, Lournal of Quality Management VOL. 16, no. 3, 2009, ASQ


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