A number ofstudies have inculcated the positive impact of ISO 9001 on organizationalperformance. However, a significant amount of studies have questioned theseoptimistic views. For example; Yeung (2011) showed that certification has asigni?cant negative impact on return on assets, especially in the ?rst twoyears, whereas, Jacqueline and Samuel (2015) have discovered that the ISO 9001certification has a positive influence on the organizations’ return on assetsthus improving its performance. Similarly,as per the study of Starke and Fouto (2012), ISO 9001 certification is linkedwith an enhancement in sales revenues, reduction in value of goods sold of theorganizations but, Wayhan et al. (2002) studied a sample of 96 United states’organizations and found no increase in sales, cost savings and profitability ofISO 9001 certified organizations. These examples are the evidences for a lackof agreement among researchers regarding the relationship between ISO 9001certification and the organizational performance.
Therefore, additionalresearch is necessary to find the impact of ISO 9001 certification in Pakistan.Moreover, as per the recommendations of Vasileios and Odysseas (2015),motives for ISO 9001 certification should also be examined in order to find outthe causes of the final positive or negative impacts. The researchstudies carried out in Pakistan show that these studies are based on veryspecific contexts of an organization (Salman & Raza, 2012) or a sector (Hayat & Ishaq, 2003).
The specificareas and sectors are not generally representative of whole population ofcertified organizations. Hence, there is a lack of research work on discoveringthe overall impact of ISO 9001 on the certified organizations of Pakistan.Moreover, motives for the ISO 9001 certification need to be determined as wellin order to find the reasons of that impact on certified organizations. 1.1 Definitionsof variables 1.1.
1 OrganizationalPerformance OrganizationalPerformance is the degree by which the goals and objectives of an organizationare fulfilled. Performance measures can be broadly grouped into two categories,that is, Internal and External performance measures (Vasileios & Odysseas,2015; Gilberto et al, 2013; Corbett et al, 2003). Internal performance measures are related to the parameters whichhappen within the company, for example, product quality, cycle time, etc.Whereas, External performance measuresare related to the image and functions outside the company, for example, marketshare, opportunity for export, etc. 1.1.2 Motivation Motivationis the willingness to exert high level of efforts to reach organizational goals,conditioned by effort’s ability to satisfy needs (Robbins & Decenzo, 2004).
It represents the forces acting to behave in specific, goal-directed manner.(Slocum & Hellriegel, 2007). Motives for implementing ISO 9001have been grouped into two categories by most of the studies on this topic,that is, internal and external motives. Internalmotivations are associated with the objective of achieving improvement inthe organization, whereas Externalmotivations are mostly associated with promotional and marketing concerns,customer demands, enhancement of market share etc. (Paulo et al.
, 2009). Chapter 3 2. THEORETICAL FRAMEWORK 2.1 ISO9001 Certification and Organizational Performance Bhattacharyyaand Sanghamitra (2010) describe organizational performance as a measureof well management of the organizations and the importance they give tocustomers and rest of the stakeholders. Laihonen (2013) related the performanceof an organization to the achievement of its objectives.
In fact, it is hard tofind one clear definition of organizational performance in the literature,however, it can be concluded that it relates to the degree by which the goalsand objectives of an organization are fulfilled. These objectives are primaryand secondary ones. Primary measures are related to internal performance of theorganization and secondary measures are related to the meeting the needs of thecustomers (Slack et al., 2001). Measuring the Performance is a very importantmanagement instrument, because measurement is the first requirement to improvesomething (Salaheldin, 2009).
The way to perform measurement in qualitymanagement system is to identify and measure the impact of ISO 9001 practices.The parameters to be measured must consist of all the operations and processesrequired to perform the tasks of a modern organization and must not be limitedto financial parameters only, otherwise it would be a partial depiction of thefirm overall performance. Hence, performance is a highly critical means ofevaluating the responsibility of management, especially in the competitivemarket of the modern era. A number of studies have created a framework tomeasure organizational performance, containing different measuring parameters.Some has used financial measures only and others have used additionalparameters. This study is not limited to measuring the financial parametersonly as the literature review shows that the ISO certification may have animpact on various measures of performance. On the basis ofliterature review (Vasileios & Odysseas, 2015; Gilberto et al, 2013;Corbett et al, 2003), it can be said that performance measures can be broadlygrouped into two categories, that is, Internal and External performancemeasures.
Internal measures are related to the parameters which happen withinthe company, for example, product quality, cycle time, etc. Whereas, externalmeasures are related to the image and functions outside the company, forexample, market share, opportunity for export, etc. The measures in this studyhave been taken from the research work of Corbett et al. (2003), in which 15countries around the world were studied to find the motivations and benefits ofimplementing ISO 9001 standard. The Internal Performance Measures includes thecost reduction, environmental and quality improvement, improvement inproductivity, profit margin, internal procedures and employee morale. TheExternal Performance Measures include the improved corporate image, increasedin market share, customer satisfaction and on time delivery to the customers,Improvement in relation with communities and authorities.
The external measuresmay also be further classified into two categories, that is, Marketingperformance (corporate image, increased in market share, customer satisfactionand on time delivery to the customers) and Relationship performance (relationwith communities and authorities). Organizational Performance Measures aretabulated in