A number of
studies have inculcated the positive impact of ISO 9001 on organizational
performance. However, a significant amount of studies have questioned these
optimistic views. For example; Yeung (2011) showed that certification has a
signi?cant negative impact on return on assets, especially in the ?rst two
years, whereas, Jacqueline and Samuel (2015) have discovered that the ISO 9001
certification has a positive influence on the organizations’ return on assets
thus improving its performance. Similarly,
as per the study of Starke and Fouto (2012), ISO 9001 certification is linked
with an enhancement in sales revenues, reduction in value of goods sold of the
organizations but, Wayhan et al. (2002) studied a sample of 96 United states’
organizations and found no increase in sales, cost savings and profitability of
ISO 9001 certified organizations. These examples are the evidences for a lack
of agreement among researchers regarding the relationship between ISO 9001
certification and the organizational performance. Therefore, additional
research 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 out
the causes of the final positive or negative impacts.
studies carried out in Pakistan show that these studies are based on very
specific contexts of an organization (Salman & Raza, 2012) or a sector (Hayat & Ishaq, 2003). The specific
areas and sectors are not generally representative of whole population of
certified organizations. Hence, there is a lack of research work on discovering
the overall impact of ISO 9001 on the certified organizations of Pakistan.
Moreover, motives for the ISO 9001 certification need to be determined as well
in order to find the reasons of that impact on certified organizations.
Performance is the degree by which the goals and objectives of an organization
are 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 which
happen within the company, for example, product quality, cycle time, etc.
Whereas, External performance measures
are related to the image and functions outside the company, for example, market
share, opportunity for export, etc.
is 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 9001
have been grouped into two categories by most of the studies on this topic,
that is, internal and external motives. Internal
motivations are associated with the objective of achieving improvement in
the organization, whereas External
motivations are mostly associated with promotional and marketing concerns,
customer demands, enhancement of market share etc. (Paulo et al., 2009).
9001 Certification and Organizational Performance
and Sanghamitra (2010) describe organizational performance as a measure
of well management of the organizations and the importance they give to
customers and rest of the stakeholders. Laihonen (2013) related the performance
of an organization to the achievement of its objectives. In fact, it is hard to
find one clear definition of organizational performance in the literature,
however, it can be concluded that it relates to the degree by which the goals
and objectives of an organization are fulfilled. These objectives are primary
and secondary ones. Primary measures are related to internal performance of the
organization and secondary measures are related to the meeting the needs of the
customers (Slack et al., 2001). Measuring the Performance is a very important
management instrument, because measurement is the first requirement to improve
something (Salaheldin, 2009). The way to perform measurement in quality
management system is to identify and measure the impact of ISO 9001 practices.
The parameters to be measured must consist of all the operations and processes
required to perform the tasks of a modern organization and must not be limited
to financial parameters only, otherwise it would be a partial depiction of the
firm overall performance. Hence, performance is a highly critical means of
evaluating the responsibility of management, especially in the competitive
market of the modern era. A number of studies have created a framework to
measure organizational performance, containing different measuring parameters.
Some has used financial measures only and others have used additional
parameters. This study is not limited to measuring the financial parameters
only as the literature review shows that the ISO certification may have an
impact on various measures of performance.
On the basis of
literature review (Vasileios & Odysseas, 2015; Gilberto et al, 2013;
Corbett et al, 2003), it can be said that performance measures can be broadly
grouped into two categories, that is, Internal and External performance
measures. Internal measures are related to the parameters which happen within
the company, for example, product quality, cycle time, etc. Whereas, external
measures are related to the image and functions outside the company, for
example, market share, opportunity for export, etc. The measures in this study
have been taken from the research work of Corbett et al. (2003), in which 15
countries around the world were studied to find the motivations and benefits of
implementing ISO 9001 standard. The Internal Performance Measures includes the
cost reduction, environmental and quality improvement, improvement in
productivity, profit margin, internal procedures and employee morale. The
External Performance Measures include the improved corporate image, increased
in market share, customer satisfaction and on time delivery to the customers,
Improvement in relation with communities and authorities. The external measures
may also be further classified into two categories, that is, Marketing
performance (corporate image, increased in market share, customer satisfaction
and on time delivery to the customers) and Relationship performance (relation
with communities and authorities). Organizational Performance Measures are