The Effect of the ISO 9001 Quality Managment System on the Performance of SMEs

International Journal of Quality & Reliability Management The effect of the ISO 9001 quality management system on the performance of SMEs Mehmet S#tk# #lkay Emre Aslan

Ar t i c l e in f or mat i o n: To cite this document: Mehmet S#tk# #lkay Emre Aslan, (2012),"The effect of the ISO 9001 quality management management system on the performance of SMEs", International Journal of Quality & Reliability Management, Vol. Vol. 29 Iss 7 pp. 753 778 Permanent link to this document: http://dx.doi.org/10.1108/02656711211258517 ) T P ( 6 1 0 2 y r a u n a J 1 3 0 1 : 5 0 t A y t i s r e v i n U c i t n a l t A a d i r o l F y b d e d a o l n w o D

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The effect of the ISO 9001 quality management system on the performance of SMEs Mehmet Sıtkı ˙Ilkay Department of Business Administration Administration,, Erciyes University, Kayseri, Turkey, and

Emre Aslan ) T P ( 6 1 0 2 y r a u n a J 1 3 0 1 : 5 0 t A y t i s r e v i n U c i t n a l t A a d i r o l F y b d e d a o l n w o D

Quality management system 753 Received 22 Decemb Received December er 2010 Revised 28 March 2011 Accept Acc epted ed 27 Sep Septem tember ber 2011

Department of Business Administration Administration,, Gaziosmanpas¸a ¸a University, Tokat, Turkey Abstract Purpose – The purpose of this study is to examine whether there is a difference between ISO 9001 certified and non-certified companies in terms of performance. Design/methodology/approach – In order to determine the effect of certification on performance, motivation motiv ationss for certifi certificatio cation n and comp companie anies’ s’ qual quality ity prac practices tices have havebeen been cons considere idered d as facto factors. rs. A surv survey ey was car carrie ried d ou outt wit with h 255 sma small ll to med medium ium-si -sized zed ent enterp erpris rises es (SM (SMEs) Es) in Tur Turkey key.. The dif differ ferenc ences es be betwe tween en certified and non-certified companies in terms of performance and quality practices were examined by one-way analysis of variance (one-way ANOVA). Findings – The res results ults sho showed wed no sta statist tistica ically lly sig signifi nifican cantt dif differ ferenc encee bet betwee ween n cer certifi tified ed and non-c no n-cert ertifi ified ed co comp mpani anies es in ter terms ms of pe perfo rforma rmanc nce. e. Ce Certi rtific ficati ation on sho showed wed no di direc rectt eff effec ectt on performance. Also it has been claimed that the quality practices of certified companies was higher than those of non-certified companies, according to results it is showing a statistically significant difference, in the 0.01 level of significance. However, higher quality practice does not necessarily mean higher performance. Motivations for certification also affect performance; it was found that companies that are inter internally nally motivated motivated for certi certificat fication ion have partially partially high higher er perf performa ormance nce than companies companies externally motivated. Originality/value – To the authors’ knowledge, this is the first study examining examining the effect of the ISO 9001 quality management system on the performance of SMEs in Turkey. Keywords ISO 9000, Quality management system, Quality management, Performance, Performance management, SME, Small to medium-sized enterprises, Turkey Paper type Research paper

1. Introduction Ensuring quality does not only mean producing a product in a standardized manner; it also requires continuously meeting expectations in changing conditions. Thus, quality must mu st be co cons nsid ider ered ed in a sy syste stema mati ticc wa way y an and d qu qual alit ity y of th thee sys syste tem m sh shou ould ld be em empha phasi size zed d rather than quality of the product. When a system is implemented that depends on process pro cesses es tha thatt pro provid videe goo good d qua qualit lity y goo goods ds and ser servic vices es and tha thatt con continu tinuous ously ly imp improv roves es under changing conditions the output of the system also results in improved consistent quality. The most widely used method for implementing a system of this kind is the ISO 90000 qua 900 qualit lity y man managem agement ent syst systems ems sta standa ndards rds.. Thi Thiss sta standa ndard rd pro propos poses es pra practi ctices ces for companies to meet customer and legal requirements in a systematic way. It is important to ensure a continuous and standardized approach to the concept quality.

International Journal of Quality & Reliability Management Vol. 29 No. 7, 2012 pp. 753-778 q Emerald Group Publishing Limited 0265-671X DOI 10.1108/02656711211258517

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ISO 9000 is a quality management system standard used by many organizations worldwide, whether they are manufacturing or service, private or public. It is preferred by many institutions whose objective is to implement, manage and improve their operations regularly in accordance with customers’ needs and expectations. The aim of this standard is to ensure the quality of systems in which goods and services are produced. ISO 9000 standards provide an institution with well-documented procedures to followin providing goods and services. These procedures define howthe tasks should be done, in this way guaranteeing goods and services that meet customer requirements (Singels et al., 2001, p. 63). They do not guarantee product quality, but they only ensure that a company has a set of procedures for quality management (Wayhan et al., 2002, p. 217). They encourage product quality but cannot ensure it alone (Terziovski et al., 1997, p. 1). Certification only means that an independent auditor certifies that a quality system has been implemented in accordance with general norms (Martinez-Costa and Martinez-Lorente, 2003, p. 1179). ISO 9000 documents the processes in a system and checks if they meet the guidelines or not (Stevenson and Barnes, 2001, p. 46). The basic principles behind ISO 9000 are formally defining customer requirements, making plans to meet them, checking if they have been met or not, and taking action if abnormalities are determined (Schenkel, 2004, pp. 1155-68). The ISO 9000 standard is the most well-known and widely used quality management system. Although it has different names in different countries, it has become the international language for quality. Some American military (MIL-Q-9859) and NATO (AQAP-1) standards are the origins for ISO 9000 (Gustafsson et al., 2001, p. 232). The British Standards Institute’s BS 5750, the first commercial quality management standard, was transformed with a few changes to the ISO 9000 international standard in 1987. This international standard was revised in 1994, but it was a minor revision. ISO 9000:2000 was published in December 2000, and it was a comprehensive revision (Boulter and Bendell, 2002, p. 37). ISO 9000 is the generic name for quality management standards. According to the 1994 version of the ISO 9000 family of standards, companies were to be certified with ISO 9001, 9002 or 9003. However, in 2000 version, companies can only be certified under ISO 9001 (Quazi and Jacobs, 2004, p. 515). As a management standard, ISO 9000 proposes a general model that provides companies with the means to implement and maintain a quality system. Being generic, ISO 9000 can be implemented in any kind of institution regardless of its size, product or sector. So small companies can implement it as well (Briscoe et al., 2005, p. 310). Researchers, dealing with the effects of ISO 9000 on companies mention the lack of studies in this field on SMEs and suggest research should be done on these kinds of companies considering their importance in economies (Briscoe et al., 2005, p. 309; Sharma, 2005, p. 170). In the last decade the number of ISO 9000 certified companies has proliferated. The increasing number of certified SMEs is the reason for this study. This study concerns whether performance of the SMEs improved as a result of certification. While SMEs constitute 96-99 percent of all businesses in Turkey and worldwide, Turkey is behind the world in its share of SMEs in areas of employment, investment and export (Akgemci, 2001, p. 17). Financial resources are the biggest obstacle


to SMEs certification. Unlike big companies, SMEs money and resources are very limited to help them during the certification period (Karapetrovic et al., 1997, p. 31). This limitation causes SMEs to fall behind in applying quality improvement activities (Gustafsson et al., 2001, p. 234). Depending on existing quality practices, small and even medium sized companies struggle to allocate resources during the one to two year-long certification period (Puderbach and Brown, 1998, p. 1696). Therefore, SMEs need to perform a cost-benefit analysis before applying for certification. In this study, a survey was conducted asking 255 certified, seeking certification and non-certified SMEs to determine the effect an ISO 9001 certificate had on business performance. Previous studies on the effects of ISO 9001 and similar quality systems are summarized in Section 2 of the study. In Section 3, performance measurement systems are mentioned, the relation between ISO 9001, performance and factors effecting this relation are examined. In Section 4 the method used in the study is described, and in Section 5, the results of the data analysis and hypothesis tests are discussed. 2. Literature Many studies are available in the literature about certification’s benefits to companies and its effects on performance. However, there is no consensus among them. While some claim that certification has benefits and increases performance, others claim that it has no benefits or effect on performance. A few conclude that it has a very limited effect on performance. Some studies in the literature are case studies which consider the quality management practices of a single company (Barak et al., 2003; Staines, 2000; Elmuti and Kathawala, 1997). Although case studies are ideal for success stories, they do not actually prove that quality certification improves performance. They only show it is possible (Heras et al., 2002a, p. 72). Some research on the benefits of certification involving more than one company asked what the direct benefits were. These studies were also defective because they covered onlycertifiedcompanies did not compare them with non-certifiedcompanies and did not ask about the benefits directly (Skrabec et al., 1997; Ofori and Gang, 2001; Casadesus and Gimenez, 2000; Mezher and Ramadan, 1999; Withers and Ebrahimpour, 2001; Dissanayaka et al., 2001; McAdam and McKeown, 1999). Another group of studies related to this subject tried to establish a cause-effect relationship by asking questions about performance. These studies compared certified and non-certified companies or before and after certification. In addition to studies which analyze the relationship between ISO 9001 certification and performance, other studies analyzing the relationship between TQM, quality practices and performance also exist. These casual studies can be grouped under three classes according to their results: certification has: (1) a positive effect; (2) a limited effect; or (3) no effects on performance.

Some studies found certification had a positive effect on performance: in a study on 106 SMEs (Koc, 2007) certified companies were found to be better than non-certified in terms of performance, manufacturing and competition parameters. Adherence to ISO 9000 practices was claimed to improve SMEs’ performance (Bayati and Taghavi, 2007). Certification was said to affect performance positively (Gotzamani et al., 2007).

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The result of a study on manufacturing companies’ quality practices found certification had positive effects on overall business performance (Eroglu, 2004). A study of 146 companies’ stated that certified companies showed higher performance than non-certified companies (Chow-Chua et al., 2003). In a study examining ISO 9000 and TQM’s effect on performance, Sun determined that ISO certified companies exhibited better performance in terms of defective products, customer complaints, profitability and productivity. However, they showed limited effects on their position in the market and competitiveness. In addition they showed no effect on employee satisfaction and environmental protection (Sun, 2000). Another study found a significant difference between ISO 9000 certified and non-certified companies (Ismail et al., 1998). In some studies, ISO 9000 certification was also found to affect performance positively. However, these studies used financial ratios or stock values to measure performance. Sharma (2005) stated that there was a relationship between certification and improvement in financial performance. In a study about effects of certification on financial performance, certified companies were determined to have better performance than non-certified (Naser et al., 2004). Another study on certification’s effect on financial performance analysed the stock value and financial ratios of a limited number of companies. The stock exchange is said to react positively to certification. Financial ratios seem to decrease in the year after certification, but after that, an increase in the ratios has been observed. This is due to the high cost of certification. However, in the long run, benefits exceed cost (Beirao and Cabral, 2002). Nicolau and Sellers (2002) examined the reaction of the stock exchange to certification and found a positive reaction in spite of abnormal movements having beenobserved on the day when certification was announced to the stock exchange. Another study examining certification’s effect on companies’ financial indicators found that, while certified companies’ rates of return were 20 percent higher than non-certified one year before certification, it was 35 percent two years after certification. This meant that certified companies increased their financial performance compared to their own pre-certification and to that of other non-certified companies (Haversjo¨, 2000). In a study examining the effect of certification on companies’ stock values, it was found that the market reacts positively to the certification of small companies, but not to certification of bigger companies. Two reasons are suggested. First, investors do not attach much importance to certification of big companies because they think big and well-known companies do not need to have an external quality indicator. However, they perceive that small companies show their commitment to long-term quality standards by seeking certification. Second, investors think that the benefits and cost of certification for big companies are about the same, but forsmall companies, the benefits will exceed costs in the long-term (Docking and Dowen, 1999). In a study examining the effect of certification on revenues and net income in America, companies’ performance both before and after certification showed the increase in revenue and net income was above average after certification was received as compared to before certification (Puderbach and Brown, 1998). Other studies found that ISO 9000 had a very limited effect of ISO 9000 on performance. According to the model in one study, ISO 9000 installation was positively related with ISO 9000 practices, practice was positively related to operating performance and operating performance was positively related to overall performance. As a result it was found that the implementation of ISO 9000 improved operating performance. However, it was emphasized that this does not necessarily lead to better performance


(Naveh and Marcus, 2005). Wayhan etal. (2002) foundISO 9000 to have no effect on sales, equity and gross margin, and a very limited effect on return on assets. In another study between certified and non-certified companies a significant difference was found only in terms of cash flow among 13 performance criteria (Terziovski et al., 1997). Some studies found certification had no effect on performance. In a study of 30 companies in Spain, fluctuations in stock values were analyzed from three days before untill three days after the announcement of certification. However, no satisfactory proof was found about the market’s positive reaction to certification(Martinez-Costa and Martinez-Lorente, 2003). Another study found that ISO 9000 had no effect on performance in terms of financial criteria (Tsekouras et al., 2002). From a financial perspective, a study examining the effects of certification on companies’ stock value, fluctuations in stock values were analyzed from two weeks before till twoweeks after the announcement of certification. However, any reaction to certification in the market was determined. According to Aarts and Vos (2001), stock market does not value the certification result, but it values the certification process. In another study comparing financial performance of certified companies with non-certified, Lima et al. (2000) did not observe different performance levels between the two groups. A study of 500 companies in four different countries (USA, Mexico, India, China) found a significant difference between certified and non-certified companies in terms of quality management practices and quality results (Rao et al., 1997). However, a study in Singapore contradicts Rao et al. and found no difference between certified and non-certified companies (Quazi et al., 2002). In a study where no difference was found between certified and non-certified companies, it was stated that certification alone cannot be a reason for performance improvement, and that motivation for certification were significantly related with performance (Singels et al., 2001). Only oneresearch was found about thenegative effects of ISO9000 certification. In this long-term study, the performance of companies was compared from three years before to three years after certification. A loss in performance was determined rather than an improvement.Also whencertifiedand non-certifiedcompanies havebeencomparedin the same study, the performance of the certified companies was found to be worse than the non-certified companies. Finally, it was found that, while certified companies showed better performance than non-certified companies before certification, after certification they fellbehind the non-certified companies (Martinez-Costa and Martinez-Lorente, 2007). 3. ISO 9000 and performance 3.1 Performance Companies use performance measures for evaluating, controlling and improving their processes, as they move toward realizing their goals and targets (Ghalayini and Noble, 1996, p. 63). A performance measurement system is a set of performance measures that provides useful information to help managing, controlling, planning and realizing the company’s operations. Information gathered from a performance measurement system must be complete, relevant, timely and easily accessible by users. Moreover, these measures must be designated so that they reflect the important factors affecting the productivity of different processes (Tangen, 2005, p. 46). A performance measurement system motivates the improvement process itself, besides bringing a quantitative view to effects of quality improvement processes to the company (Najmi and Kehoe, 2001, p. 170).


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Criteria used to measure performance, can be divided into financial and non-financial. While financial measures are used in some research (Sharma, 2005; Naser et al., 2004; Heras et al., 2002a; Beirao and Cabral, 2002; Wayhan et al., 2002; Tsekouras et al., 2002; Lima et al., 2000), in some only non-financial measures (Samson and Terziovski, 1999; Elmuti and Kathawala, 1997) and in some both financial and non-financial measures (Naveh and Marcus, 2005; Yeung et al., 2003; Rahman, 2001; Singels et al., 2001; Zhang, 2000; Terziovski et al., 1997; Mann and Kehoe, 1994) were used. Performance measurement systems which rely on traditional financial data cannot provide the required information for a company to remain competitive in today’s environment. Financial indicators, shows how a company has performed in the past (Najmi and Kehoe, 2001, p. 162). Although financial indicators have the advantage of being certain and objective, they suffer from the fact that they are lagging indicators, and they disregard less concrete factors like product/service quality, customer satisfaction, employee morale (Parker, 2000, p. 63). As non-financial criteria like product quality, defects, customer satisfaction are obtained by people working for the company, they are subjective (Sharma, 2005, p. 152). At this point a problem occurs; financial measures are objective but insufficient, and non-financial measures are sufficient but subjective. It is not surprising that companies hesitate to give information about profitability, return on investment, etc. To avoid this problem, an indirect approach needs to be used during data collection. Instead of asking for specific numbers about a company’s objective measures, questions such as “how good?” is the company in terms of profitability, profit margins, etc. should be asked (Lopez et al., 2005, p. 153). Therefore, managers and employees of these companies also need to be asked about their (SMEs) objectives. Because it is difficult to get answers by asking directly, questions should be asked indirectly. Consequently, the only alternative is to use a subjective approach in matters concerning companies’ financial and non-financial measures. In some studies that measure business performance by financial criteria, it is recommended that performance should also be measured using non-financial criteria as efficiency, productivity, market share, etc. (Lima et al., 2000, p. 147; Wayhan et al., 2002, p. 229). In order to compare companies, criteria used in performance measurement should be as general as possible, appropriate for different sectors and not too detailed. Moreover, detailed criteria may be unsuitable in research on SMEs from different sectors. Not all companies may use such criteria, as they may be inappropriate to a particular sector. Therefore, general, appropriate criteria must be used. In this study, financial and non-financial criteria were used simultaneously to measure performance. The Balanced Scorecard method (Kaplan and Norton, 1992) was preferred as a framework to determining criteria. Balanced Scorecard method includes financial measures, which give the results of previous performance and act as a complement to operational measures regarding customer satisfaction, internal processes and innovation and learning activities which are predictors of future financial performance (Kaplan and Norton, 1992, p. 71). The Balanced Scorecard answers four basic questions (Kaplan and Norton, 1992, p. 72): (1) How do customers see us? (customer perspective). (2) What must we excel at? (internal perspective).

(3) Can we continue to improve and create value? (innovation and learning perspective). (4) How do we look to shareholders? (financial perspective). The Balanced Scorecardshould be taken as a template, andnew perspectives and criteria must be added or discarded as necessary. “Balanced” means viewing performance from different dimensions and perspectives.


3.2 ISO 9000 – performance relationship In the literature there is no consensus on the relationship of ISO 9000 and performance. While some claim that certification has benefits and increases performance, others claim that it has no benefit and does no affect performance. Is ISO 9000 really worthless or is that an impression from malpractices or overly high expectations? In order to derive benefit from ISO 9000, companies should consider the standard not as a temporary solution but as a long-term investment which requires involvement and continuous effort (McAdam and McKeown, 1999, p. 232). Certification is costly, time-consuming and demanding in the short-term. A long-term view is required in order to benefit from it (Stevenson and Barnes, 2001, p. 50). Problems in presenting and implementing the standard (Conti, 2004, p. 666), and short-term expectations (Tsekouras et al., 2002, p. 838) result in ISO 9000 not affecting performance or the effect is misunderstood. Obtaining certification, but not fulfilling its requirements will certainly not result in any benefit to the company. Moreover, after getting and applying the certification, improvement should not be expected in financial indicators in the short-term. These unrealistic expectations create the impression that certification is worthless. The benefits to be gathered from certification are fully related to how a company wants to use it. If its aim is only to get a certificate and to enhance its image, documentation and procedures will harm daily business processes and will not contribute to improved performance (Sun, 2000, p. 177). Efforts to achieve ISO 9000 generally deviate from the real aim, and organizations miss the relationship between ISO 9000 and total quality. In this situation efforts for certification are transformed into a bureaucratic exercise. Not the standard itself but its initials are sought and its real aim and benefits disappear (Tague, 1994, p. 24). How can a “standard” which is the same for all companies give them competitive advantage. If significant differences in practice are not considered, companies become stereotyped. Differences in practice allow one company to benefit more than another, so a standard aiming to make companies similar may result in differentiation which provides a basis for competitive advantage (Naveh and Marcus, 2005, p. 24). The quality system of a company is affected by its objectives, product, service, and applications unique to it, and so one quality system differs from another (Terziovski et al., 2003). While fulfilling the requirements of ISO 9000 certification, companies need to derive maximum benefit from the application to gain a competitive advantage. In this context a standard is just an instrument, and every organization must set up its own strategy (Ofori and Gang, 2001, p. 150). A company must combine ISO 9000 with total quality philosophy, human resources and strategic management (Sun, 2000, p. 177). ISO 9000 is a valuable instrument for companies trying to develop a quality system.


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The real value of the certificate will be obtained when it becomes consistent with companies’ strategic direction (Curkovic and Pagell, 1999, p. 65). A quality management system increasingly focused on quality results in more time to produce acceptable products, less time spent on rework, scrap and waste. These improvements lower cost and increase sales depending on improved product quality, on-time delivery and fewer customer complaints. All these quality benefits do not happen automatically but, having quality certification is expected to increase the sales opportunity, volume and profitability, so ISO 9000 certified companies are expected to perform better (Heras et al., 2002b, p. 776; Naveh and Marcus, 2005, p. 11). Generally a cause-effect relationship like the one described above exists between ISO 9000 and performance. This means that an ISO 9000 quality management system will increase performance, so certified companies will perform better than non-certified. However, the opposite must be considered as well whether high performing companies actually follow ISO 9000 certification guidelines. Research on 400 certified and 400 non-certified companies found certified companies performed better that non-certified in financial (sales growth and profitability) terms. However, when the performance of certified companies was compared before and after certification a difference was not observed. The performance of certified companies before certification was also higher than non-certified (Heras et al., 2002b, p. 788). In this case instead of claiming “ISO 9000 increases company performance” one must consider if high performing companies tend to be certified in any case. In this research certified companies were found to have higher performance than non-certified, and considering that this was also before certification, one can conclude that high performing companies achieved certification, but that certified companies did not have higher performance. Here it must be notedthat a number of studieshave found no difference between certified and non-certified companies. Moreover, in a framework of this kind of reverse cause-effect relationship, it is hard to explain studies which find a difference between the performance of companies before and after certification. The explanatory power of a direct cause-effect relationship between ISO 9001 and performance is weak. Even though certification is assumed to improve performance, the cause of improvement is not certification itself but improved quality practices and processes resulting from certification. Therefore, factors affecting the relationship between ISO 9001 and performance must be considered when constructing a model. ISO 9001 certification alone cannot improve performance. While analyzing performance differences between companies, factors other than certification must also be considered. Factors like reasons for certification and motivation for certification may affect performance. A quality culture and practice is another factor. Consultancy service during the certification period, senior management’s support and attitude, employees’ attitude, company size, time since certification, expectations before certification, strategic orientation of the company, etc. are other factors which affect the certification-performance relationship (Buttle, 1997, p. 943; Terziovski et al., 2003, p. 592; Dimara et al., 2004, p. 85; Naveh et al., 2004, p. 1843; Sharma, 2005, p. 167). Taking all factors into consideration in one study is not possible. In this study, motivations for certification and quality practices are considered as factors affecting the relationship. 3.2.1 Motivation for certification. Most companies claim that their motivations for certification are improving quality, satisfying customers, etc. However, these are not


usually the “real” motivators. External pressures, certified competitors, advertising needs are the real motivators behind most certification applications (Gotzamani and Tsiotras, 2002, p. 151). The benefits of ISO 9000 can be classified into two groups: internal and external. Internal benefits such as an increase in productivity, improved efficiency, reduction in cost and waste, better management control, clearly defined tasks and responsibilities and an increase in employee motivation are related to the internal functions of the organization. External benefits such as competitive advantage, increase in sales and market share, opportunity for new markets, new customers, increasing customer satisfaction, improvement in companies’ reliability and image are related to the environment of the organization (Singels et al., 2001, p. 63). In this context, motivations for certification can be similarly grouped as internal and external. In some studies examining the relationship between certificate and performance, motivations for certification have been considered as a factor. In all these studies it is claimed that internally motivated companies have higher performance than externally motivated companies (Park et al., 2007, p. 42; Brown et al., 1998, p. 284; Withers and Ebrahimpour, 2000, p. 440; Huarng et al., 1999, p. 1009; Terziovski et al., 2003, p. 594; Martinez-Costa and Martinez-Lorente, 2003, p. 1181; Gotzamani and Tsiotras, 2002, p. 166; Leung et al., 1999, p. 675; Atherton and Austin, 1996, p. 25; Escanciano et al., 2001, p. 492; Jones et al., 1997, p. 658). If ISO 9000 certification is only in response to external customer pressure, it is hard to perceive what benefits the company would receive from the quality system (Brown etal., 1998, p. 284). Companies motivated for certification by customer pressure are found to benefit less (Leung etal., 1999, p. 675). Companies gain benefits of increased performance when they aim to show their customers more than a paper (Martinez-Costa and Martinez-Lorente, 2003, p. 1181). Furthermore, externally motivated companies may not be interested in improving quality and processes which are the real purposes of the certificate. However, internally motivated companies are already interested in the continuous improvement of quality so they can perceive benefits more easily (Escanciano et al., 2001, p. 492). 3.2.2 Quality practices. The key point in the relationship between ISO 9001 and company performance is quality practices. It is not certification itself, which will improve performance; it is the improved quality practices resulting from certification. ISO 9000 standard is actually aimed at improving quality practices and business processes. Although motivations for certification affect certification usage and so, inturn quality practices, it is expected that ISO 9001 certification will affect companies’ quality practices and as a result, performance. In studies examining the effects of ISO 9001 certification on companies’ quality practices, the quality practices of certified companies were found to be higher than those of non-certified companies (Rao et al., 1997, p. 342; Gupta, 2000, p. 451). The opposite is also possible. In a study between certified and non-certified companies no difference was found in terms of six critical factors of TQM (Rahman, 2001, p. 38). The internal improvement that ISO 9000 provides to companies requires all business activities to be in a continuous plan, control and documentation cycle. This cycle, maintains regular calibration of measuring and test equipment, prevents the delivery of nonconforming products and decreases the number of rejected products (Wilson et al., 2003, p. 3). Product quality which is better than competitors, better process control,


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efficient quality management which improves with quality control will decrease defects and reworks, reduce costs, depending on these sales and competitive advantage will increase. All these factors result in better performance (Heras et al., 2002b, p. 776). 4. Methodology This study was performed with a sample of 255 Turkish SMEs in order to analyze the effect of the ISO 9001 Quality Management System on SMEs’ organizational performance. In this study, first the differences in performance between the companies with and without ISO 9001 certification were examined. Then, the quality practices that affect certification and the business performance relationship and motivation for having ISO 9001 certification were investigated. Data obtained from questionnaires was analyzed using SPSS 10.0 for Windows Statistical Package Program.In hypothesis tests,a one-way ANOVAwas used to determinethedifferences between the SMEs’ level of quality applications andperformance.

4.1 Sample The sampling space of the research was all SMEs in Turkey. In this study, the SME Information Network (KOBINET) database was used for selecting samples. The KOBINET database contains more than 21,404 SME records. 1,000 SMEs were selected from the database because of the difficulty of obtaining responses from SMEs. An e-mail was sent to 892 SMEs. We were unable to communicate with 117 SMEs owing to e-mail address errors. 255 usable questionnaires were received representing a response rate of 32.9 percent. The sectoral distribution of companies answering the survey is shown in Table I. Companies working in the field of machinery equipment came in first place with 17.6, 11.8 percent with the metal industry/metal work sector followed. Services sector included the media, advertising, architecture projects, transportation, IT, computer, software and internet. Others included industrial ventilation, industrial refrigeration, mining, medical devices, energy and rubber. The size of responding companies by number of employees is shown in Table II. 40.8 percent of the companies employed fewer than ten employees, 33.3 percent of the companies employed between ten and 49 employees, and 25.9 percent of the companies employed more than 50 employees. n

Table I. Sectoral distribution of companies

Food Metal industry/metal works Machinery, equipment Textiles Electricity, electronics Construction, structure and products Chemical/oil Plastic, paper, packaging Automotive and automotive supply industry Furniture, wood work, wood products Services Other

¼

255

f

%

22 30 45 22 24 23 13 14 21 18 15 8

8.6 11.8 17.6 8.6 9.4 9.0 5.1 5.5 8.2 7.1 5.9 3.1


As seen in Table III, 43.5 percent of companies who answered the survey were ISO 9001 certified, 42.7 percent of the companies were not ISO 9001 certified and 13.7 percentof the companies were at the application stage of the ISO 9001 Quality Management System. The percentages of the ISO 9001 certified and ISO 9001 non-certified companies answer the questionnaire were very close to each other.

Quality management system

4.2 Data collection The survey method was used to collect data. Surveys were sent over the internet. The survey consisted of three sections. In the first section, 24 questions were asked to measure the companies’ level of quality applications. In the second section 20 questions were asked to measure the companies’ performance. In the third and last section ten questions were asked mainly about company information. In answers to the first and second sections, a five-point Likert scale (definitely disagree, disagree, undecided, agree, absolutely agree) was used. The statements in the first section of the survey were collected from studies in literature (Anderson and Sohal, 1999, p. 869; Badri et al., 1995, p. 53; Jeng, 1998, p. 136; Lee et al., 1999, p. 91; Sila and Ebrahimpour, 2005, p. 1148; Yeung et al., 2003, p. 562) and the ISO 9001 standard items application checklist. In thisstudy,we chose theBalanced Scorecardas theperformance measurement system framework. The quad perspective of this methodwas taken as a template.Commoncriteria would apply to different sectors were collected from different studies in the literature in line with this perspective (Augustyn and Pheby, 2000, p. 383; Mann and Kehoe, 1994, p. 33; Najmi and Kehoe, 2001, p. 166; Naveh and Marcus, 2005, p. 11; Sila and Ebrahimpour, 2005, p. 1153; Singels et al., 2001, p. 66, Sun, 2000, p. 172; Terziovski and Samson, 2000, p. 147; Terziovski et al., 1997, p. 14; Yeung et al., 2003, p. 565; Zhang, 2000, p. 135).

763

4.3 Hypotheses H 0.

There is no difference between the performances of ISO 9001 certified and non-certified companies.

Ha.

There is a difference between the performances of ISO 9001 certified and non-certified companies. n

1-9 employees 10-49 employees 50-249 employees

¼

f

%

104 85 66

40.8 33.3 25.9

n ISO 9001 certified Not ISO 9001 certified In application level

255

¼

Table II. Size of responding companies by number of employees

255

f

%

111 109 35

43.5 42.7 13.7

Table III. ISO 9000 certification status of companies

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A quality management system focusing on quality results in more time to produce acceptable products, less time spent on rework, scrap and waste. These improvements lower cost and increase sales depending on improved product quality, on-time delivery and fewer customer complaints. Having quality certification is expected to increase the sales opportunity, volume and profitability, so ISO 9000 certified companies are expected to perform better than non-certified companies (Heras et al., 2002b, p. 776; Naveh and Marcus, 2005, p. 11). If the performance of the ISO 9001 certified companies comes out higher than non-certified companies and the difference is also significant ( p-value lower than 0.05), the zero-hypothesis is rejected:

H 0.

There is no difference between the quality practice levels of ISO 9001 certified and non-certified companies.

Ha.

There is a difference between the quality practice levels of ISO 9001 certified and non-certified companies.

ISO 9001 certification alone will not improve a company’s performance, but the practices expected to develop in a company as a result of the ISO 9001 certification will. Therefore, the performance of the companies which have ISO 9001 certificates but have not fulfilled the requirements of the certification cannot be expected to be high. To determine the effect of ISO 9001 certification on companies’ quality practice level, the differences between ISO 9001 certified and non-certified companies in terms of quality practice levels must be examined. In studies examining the effects of ISO 9001 certification on companies’ quality practices, the quality practices of certified companies were found to be higher than those of non-certified companies (Rao et al., 1997, p. 342; Gupta, 2000, p. 451). Quality practice levels in certified companies are expected to be higher than those in non-certified companies. So if the quality practice levels of the ISO 9001 certified companies comes out higher than non-certified companies and the p-value is lower than 0.05 meaning the difference is significant, the zero-hypothesis is rejected:

H 0.

There is no difference between the quality practice levels of companies with ISO 9001 certification which are internally motivated and those that are externally motivated.

Ha.

There is a difference between the quality practice levels of companies with ISO 9001 certification which are internally motivated and those that are externally motivated.

Companies externally motivated for certification are found to benefit less (Leung et al., 1999, p. 675). Companies gain benefits of increased performance when they aim to show their customers more than a paper (Martinez-Costa and Martinez-Lorente, 2003, p. 1181). Furthermore, externally motivated companies may not be interested in improving quality and processes which are the real purposes of the certificate. However, internally motivated companies are already interested in the continuous improvement of quality so they can perceive benefits more easily (Escanciano et al., 2001, p. 492). The quality practice levels of companies with ISO 9001 certification which are internally motivated are expected to be higher than the certified companies which are externally motivated. If there is no difference between ISO 9001 certified and non-certified companies in terms of quality practice levels, companies’ motivation forreceiving ISO 9001 certification should be questioned. So if the quality practice levels of the internally motivated ISO 9001

certified companies comes out higher than externally motivated ISO 9001 certified companies and the difference is significant, the zero-hypothesis is rejected:


H 0.

There is no difference between the performances of companies with ISO 9001 certification which are internally motivated and those that are externally motivated.

Ha.

There is difference between the performances of companies with ISO 9001 certification which are internally motivated and those that are externally motivated.

In some studies examining the relationship between certificate and performance, motivations for certification have been considered as a factor. In all these studies it is claimed that internally motivated companies have higher performance than externally motivated companies (Park et al., 2007, p. 42; Brown et al., 1998, p. 284; Withers and Ebrahimpour, 2000, p. 440; Huarng et al., 1999, p. 1009; Terziovski et al., 2003, p. 594; Martinez-Costa and Martinez-Lorente, 2003, p. 1181; Gotzamani and Tsiotras, 2002, p. 166; Leung et al., 1999, p. 675; Atherton and Austin, 1996, p. 25; Escanciano et al., 2001, p. 492; Jones et al., 1997, p. 658). The performance of companies with ISO 9001 certification which are internally motivated are expected to be higher than companies which are externally motivated. If there is no difference between ISO 9001 certified and non-certified companies in terms of performances, companies’ implementation of ISO 9001 Quality Management System should be questioned. So if the performance of the internally motivated ISO 9001 certified companies comes out higher than externally motivated ISO 9001 certified companies and the difference is significant, the zero-hypothesis is rejected. 5. Results To test the hypothesis for the differences between the performance of ISO 9001 certified and non-certified companies, a one-way analysis of variance was used. The differences between performance criteria averages of ISO 9001 certified and non-certified companies are shown in Table IV. In terms of overall performance average, statistically significant differences were not found between the ISO 9001 certified and non-certified companies. So, H 0 was accepted. We only found a statistically significant difference in the 0.05 level of significance between ISO 9001 certified and non-certified companies in terms of financial criteria ( p 0.009). Significant differences were not found in terms of internal business criteria, customer criteria and innovation and learning criteria. Only under the subsection “innovation and learning”, we found a statistical significant difference in the 0.05 significance level between ISO 9001 certified and non-certified companies in terms of competitive position ( p 0.018). To test the hypothesis for the difference between quality practice levels of ISO 9001 certified and non-certified companies, a one-way analysis of variance was used. Companies at application stage were excluded. Differences between the quality practice level averages of certified and non-certified companies are shown in Table V. A statistically significant difference in the 0.01 level of significance was found between certified and non-certified companies in terms of quality practice levels ( p 0.000). H 0 was therefore, rejected. We found statistically significant differences in the 0.01 level of significance in the subsections “top management leadership” ( p 0.004), “quality system processes” ( p 0.000), “supplier relations” ( p 0.000), ¼

¼

¼

¼

¼

¼


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Table IV. Differences between ISO 9001 certified and non-certified companies in terms of performance

Average of ISO 9001 certified ( n 111)

Average of noncertified ( n 109)

p

3.51 3.54 3.63 3.62 3.33 3.43 3.66 3.39 3.54 3.89 3.78 3.70 4.16

3.22 3.47 3.26 3.20 2.98 3.18 3.71 3.51 3.47 3.89 3.88 3.78 4.19

0.009 * * 0.629 0.006 * * 0.002 * * 0.026 * 0.081 0.608 0.409 0.653 0.954 0.412 0.495 0.795

4.14 4.23

4.15 4.22

0.897 0.878

4.26 4.09 4.10 3.74

4.25 4.23 4.08 3.62

0.964 0.175 0.824 0.278

3.73 4.07 3.71 3.56

3.68 3.79 3.47 3.44

0.713 0.018 * 0.097 0.395

3.64 3.77

3.73 3.68

0.517 0.308

¼

Financial criteria Profitability Turnover Market share Receivables turnover Inventory turnover Internal business criteria Error, waste and re-processing costs Capacity utilization rate Defective product ratio Manufacturing lead time Employee satisfaction level Customer criteria Number of complaints from customers Customer satisfaction level The number of customers returning products On-time and full delivery Response speed of technical service Innovation and learning criteria The success of offering new products to market Competitive position Regular training for employees Return of education Time and cost savings won by implementing new methods Overall average

¼

Note: Significant at: * p , 0.05 and * * p , 0.01

“process control-improvement” ( p 0.000). No statistically significant difference was found in the subsections “customer orientation” and “human resource applications”. The scale in Figure 1 was developed for determining the motivating factor behind certification. According to the scale, companies which were 100 percent internally motivated for certification would choose the “100” option on the left; Totally externally motivated companies would choose “100” option on the right; if internal and external motivation factors were equal, companies would choose “50” option in the middleof the scale.If internal andexternal motivation factors aredifferently weighted,then the related option was chosen. For example, the “70” option on the left means that, internal motivation factors were weighted 70 percent and external 30 percent. Values used in the analysis are marked under the scale. In this analysis, while totally internal motivation factors have a value of “100”, totally external motivation factors have a value of “0”. During the analysis, companies were grouped into two: 60 and over were internally motivated, 40 and under were externally motivated. The difference between these two groups was analyzed. Companies with a value of 50, meaning internal and external ¼

Average of ISO 9001 certified ( n 111)

Average of noncertified ( n 109)

p

4.32

4.04

0.004 * *

4.45

4.15

0.005 * *

4.46

4.19

0.012 *

4.21 4.15 4.40 4.27

3.77 4.06 4.32 4.13

0.000 * * 0.449 0.394 0.212

4.46

4.41

0.576

4.45 4.26 4.16 4.01

4.43 3.94 4.04 3.81

0.774 0.000 * * 0.303 0.094

4.34 4.45 4.33 4.11 4.26

4.00 4.10 3.76 4.02 4.14

0.001 * * 0.001 * * 0.000 * * 0.339 0.286

4.13

4.07

0.594

3.94 4.21

3.84 3.82

0.385 0.000 * *

4.13 4.30 4.20 4.28 4.28 4.36 4.30 4.18

3.78 3.94 3.73 3.58 3.31 3.10 3.44 3.56

0.005 * * 0.001 * * 0.000 * * 0.000 * * 0.000 * * 0.000 * * 0.000 * * 0.000 * *

4.18 4.37 4.27

3.83 4.22 3.91

0.006 * * 0.183 0.000 * *

¼


Top management leadership Providing resources to quality activities by top management Quality policy constructed by top management Quality targets measurable on departmental basis Top management’s review Customer orientation Collecting data on customer satisfaction Investigation of data gathered from customers Use of information as a tool for improving products and services Quality system processes Success rate control of quality targets Capability of processes Criteria of conformity/capability of products Separation of inappropriate products Recording conformity results Human resources applications Clear definition of job content Clear definition of employees’ authority and responsibilities Capability of employee in terms of education and skills Supplier relations Criteria for supplier selection and evaluation Criteria for purchasing Inspection and control in acceptance Process control and improvement Tools for review and measuring Calibration of measurement tools Measurement of products Analysis of data/information Use of information in continuous improvement of quality Corrective and preventive actions Overall average

¼

Note: Significant at: * p , 0.05 and * * p , 0.01

100

90

80

70

60

50

60

70

80

90

100

100

90

80

70

60

50

40

30

20

10

0

Internal Factors

Internal and External Factors Equal

External Factors


Table V. Differences between ISO 9001 certified and non-certified companies in terms of quality practices

Figure 1. Scale of motivation factors for certification

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factors were equal, were excluded. Motivation factors for certification were asked, and answers were used for confirming the answers in the scale. A one-way analysis of variance was used in the hypothesis testing for determining the difference between quality practice levels of companies which were internally and externally motivated for certification (Table VI). Companies at the application stage for certification were not included in the analysis. Internally motivated companies were expected to have a quality practice level higher than externally motivated companies. A statistically significant difference was not found between internally and externally

Internally motivated Externally motivated ( n 38) ( n 26) ¼


Table VI. Difference between internally and externally motivated companies in terms of quality practices

Top management leadership Providing resources to quality activities by top management Quality policy constructed by top management Quality targets measurable on departmental basis Top management’s review Customer orientation Collecting data on customer satisfaction Investigation of data gathered from customers Use of information as a tool for improving products and services Quality system processes Success rate control of quality targets Capability of processes Criteria of conformity/capability of products Seperation of inappropriate products Recording the conformity results Human resources applications Clear definition of job content Clear definition of employees’ authority and responsibilities Capability of employee in terms of education and skills Supplier relations Criteria for supplier selection and evaluation Criteria for purchasing Inspection and control in acceptance Process control and improvement Tools for review and measuring Calibration of measurement tools Measurement of products Analysis of data/information Use of information in continuous improvement of quality Corrective and preventive actions Overall average Note: Significant at: * p , 0.05 and * * p , 0.01

¼

p

4.45

4.13

0.065

4.57

4.34

0.156

4.57

4.30

0.110

4.31 4.34 4.43 4.42 4.47

4.11 3.76 4.20 4.07 4.19

0.369 0.016 * 0.148 0.069 0.149

4.39 4.29 4.34 4.00 4.42 4.39 4.31 4.22 4.31

4.34 4.13 3.80 3.88 4.19 4.53 4.26 3.87 4.03

0.765 0.271 0.005 * * 0.611 0.164 0.342 0.804 0.053 0.164

4.28

3.80

0.039 *

4.07 4.33 4.28 4.36 4.34 4.37 4.44 4.39 4.31 4.23

3.76 3.98 3.76 4.11 4.07 4.23 4.26 4.53 4.38 4.03

0.141 0.052 0.014 * 0.168 0.190 0.366 0.322 0.382 0.691 0.335

4.34 4.50 4.35

3.92 4.26 4.11

0.041 * 0.187 0.094

motivated companies in the 0.05 level of significance. H 0 was accepted. Regarding quality practices sub-titles, none of them were found to be statistically significant. In the hypothesis testing to determine the difference between performance of internally and externally motivated companies, we use a one-way analysis of variance was used (Table VII). Companies at the application stage for certification were excluded. Internally motivated companies were expected to perform higher than externally motivated ones. No statistically significant difference was found between internally and externally motivated companies, in terms of overall performance average, in the 0.05 level of significance. H 0 was accepted. A statistically significant difference was found in the subsections “internal business” ( p 0.038) and “customer” ( p 0.012), in the 0.05 level of significance. ¼



¼

6. Conclusion There is no consensus about the effect of ISO 9001 certification on performance. While some claim that certification has benefits and increases performance, others claim that it has no benefit or effect on performance. However, the consensus among most studies is that there is a need for further research on this subject. Internally motivated ( n 38)

Externally motivated ( n 26)

p

3.52 3.47 3.57 3.65 3.39 3.52 3.78 3.60 3.50 4.02 3.97 3.81 4.26 4.23 4.28

3.43 3.46 3.50 3.69 3.03 3.46 3.46 3.00 3.38 3.73 3.73 3.50 3.93 3.88 4.07

0.638 0.959 0.745 0.889 0.217 0.797 0.038 * 0.016 * 0.614 0.183 0.251 0.147 0.012 * 0.007 * * 0.123

4.31 4.26 4.23 3.82

3.92 3.84 3.92 3.62

0.012 * 0.028 * 0.124 0.273

3.68 4.13 3.86 3.63

3.80 4.07 3.57 3.42

0.584 0.785 0.244 0.380

3.81 3.85

3.23 3.61

0.017 * 0.077

¼

Financial criteria Profitability Turnover Market share Receivables turnover Inventory turnover Internal business criteria Error, waste and re-processing costs Capacity utilization rate Defective product ratio Manufacturing lead time Employee satisfaction level Customer criteria Number of complaints from customers Customer satisfaction level The number of customers returning products On-time and full delivery Response speed of technical service Innovation and learning criteria The success of offering new products to market Competitive position Regular training for employees Return of education Time and cost savings won by implementing new methods Overall average Note: Significant at: * p , 0.05 and * * p , 0.01

¼

Table VII. Difference between internally and externally motivated companies in terms of performance

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To determine the relationship between ISO 9000 and performance, factors affecting the relationship need to be considered. Many factors such as motivation for certification, quality practices, consultancy service during the certification period, senior management’s support and attitude, employees’ attitude, company size, time since certification and strategic orientation of the company affect the certification-performance relationship. In this study, motivation for certification and quality practices were considered as factors that affected the relationship. First we examined whether a significant difference existed between the performance of ISO 9001 certified and non-certified companies. However, no statistically significant difference was found in terms of overall performance average. The only significant difference between certified and non-certified companies we did find was in terms of financial criteria, a subsection of performance, in the 0.01 level of significance. Actually we expected certified companies to improve themselves primarily in internal business processes and customer criteria, and then that these improvements would affect financial measures. However, the situation was opposite. When financial criteria were examined, we found certified companies were significanly better especiallyat turnover and marketshare. This may have resulted from the use of the certificate as an advertising and sales tool. In order to examine the reasons why ISO 9001 certification did not have an effect on performance, we had to determine if the certificate had any effect on the quality practices of the company. Motivation for certification also had to be considered as a factor affecting quality practices and performance of certified companies. We found a statistically significant difference between certified and non-certified companies in terms of quality practice average in the 0.01 level of significance.The quality practices of ISO 9001 certified companies was higher than non-certified companies participating in the survey. This result is similar with some studies in the literature (Chow-Chua et al., 2003, p. 936; Rao et al., 1997, p. 342; Gupta, 2000, p. 451). Moreover, a somewhat strong correlation was determined between quality practiceand performance ( r 0.643). Although we found a correlation between quality practice and performance, the quality practice of certified companies was found to be higher than non-certified in the 0.01 level of significance, we found no significant difference between certified and non-certified companies in terms of performance. This can be explained by the fact that quality practices of certified companies were higher than non-certified. However, it was not high enough to affect performance. Furthermore, while some subsections of quality practice showed a significant difference between certified and non-certified companies, some did not. This may have affected the certification and performance relationship. Motivation for certification is also a key factor affecting the performance of certified companies. In the literature it is claimed that companies which are motivated internally have higher performance than companies which are motivated externally (Brown et al., 1998, p. 284; Withers and Ebrahimpour, 2000, p. 440; Huarng et al., 1999, p. 1009; Terziovski et al., 2003, p. 594; Martinez-Costa and Martinez-Lorente, 2003, p. 1181; Gotzamani and Tsiotras, 2002, p. 166; Leung et al., 1999, p. 675; Atherton and Austin, 1996, p. 25; Escanciano et al., 2001, p. 492; Jones et al., 1997, p. 658). Nevertheless, we found no statistically significant difference between companies motivated internally and externally in terms of performance average, in the 0.05 level of significance. However, the p-value was approximate (0.077), and there were significant differences in some subsections of performance. These strengthen the probability that motivation factors affect performance. ¼


In conclusion, a direct relation could not be found between ISO 9001 certification and performance. The explanatory power of a model proposing a direct relationship between ISO 9001 and performance is weak. Because certification does not have an effect on performance, the quality practices of certified companies were found to be higher than non-certified. Alsoquality practices and performancewerecorrelated. However, certified companies’ higher quality practice does not necessarily mean higher performance. Moreover, motivation factors for certification were found to have a partial effect on performance. Motivation factors were determined as the other reason for the non-difference between certified and non-certified companies. An alternative for SME’s after certification would be investigating how efficient and in what level ISO 9001 requirements are done. In subjects that performance improvement has not been observed, system practice activities need to be continuously improved. In other words if no improvement in performance is observed after certification, then the system is so-called certified and this is the case for most SME’s in Turkey. In this case the system needs to be applied efficiently in order to improve performance. In thisstudy, motivation factors for certification and quality practices wereconsidered to be the main factors that affect the certification-performance relationship. However, there are many factors affecting this relationship. Models considering other factors like consultancy service during the certification period, senior management’s support and attitude, employees’ attitude, company size, time since certification and strategic orientation of the company may be better for examining the certification-performance relationship forfurther researches. Also new researches mayfocus on the reasons why no improvement is observed on some subjects, while expected. References

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Appendix. Survey questions

1.1 Quality Practices

776


Top Management Leadership In our company top management provides the resources to quality-related activities Our company has a quality policy created by top management In our company measurable quality objectives are established on the basis of business units In our company top m anagement regularly review quality related activities Customer Orientation Our company collects information a bout customer perception of the customer’s requirements, requests and needs In our firm data gathered from customer is investigated In our firm of information is used as a tool for improving products and services Quality System Processes In our company success rate of quality targets are controlled In our company capability of pr ocesses are investigated In our company criteria of conformity/capability of products are determined In our company inappropriate products are separated for preventing misuse or delivery In our company conformity results are recorded Human Resources Applications In our company job contents are clearly defined In our company authority and responsibilities of employees are clearly defined In our company employees affecting quality are capable in terms of education and skills Supplier Relations In our company criteria for supplier selection and evaluation are determined In our company criteria for purchasing are determined In our company inspection and control is implicated during acceptance Process Control and Improvement In our company we have tools for review and measuring In our company measurement tools are calibrated periodically In our company product characteristics are measured for conformity In our company data collected from measurements are analyzed In our company information is used in continuous improvement of quality In our company corrective and preventive actions are done

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

1.2 Performance Strongly Disagree Disagree Financial Criteria Our company is in a good condition in terms of profitability Our company is in a good condition in terms of turnover Our company is in a good condition in terms of market share In our company receivables turnover is high In our company inventory turnover rate is high


Internal Business Criteria In our company error, waste and re-processing costs are low In our company capacity utilization rate is high In our company the defective product rate is low In our company product delivery time is low In our company employee satisfaction level is high Customer Criteria In our company the number of complaints from customers is low In our company customer satisfaction level is high In our company the number of the customer returning the product is low Our company carries out deliveries on time and in full In our company response rate of the technical service is high Innovation and Learning Criteria Our company's success in putting new products on the market is high Our company's competitive position is good In our company affairs trainingare given to employees regularly The contribution of education to our company is high In our company as a result of application new methods provided time and cost savings

Neutral

Agree

Strongly Agree

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O O

O O

O O

O O

O O

O

O

O

O

O

O O O O

O O O O

O O O O

O O O O

O O O O

O

O

O

O

O

O O

O O

O O

O O

O O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O O

O O

O O

O O

O O

O

O

O

O

O

O

O

O

O

O

1.3 Demographic questions The company’s city: ……………… The company’s sector: …………….. Number of employees your company: ……………. Does your company have ISO 9001:2000 Quality Management System Certificate? OYes O No O At the application stage Please indicate which reasons that you have received ISO 9001:2000 certificateon thefollowing scale: If you received the certificatefor entirely internal reasons choose 100% option the left side. If you received the certificate for entirely external reasons, choose 100% option on the right side. Bothe qually important reasons in the middle 50% of t he option, if you have the weight of different reasons, mark the appropriate option. For example, 70% of the internal causes, external cause’s weightare 30%. 100

90

80

70

60

50

60

70

80

90

100

100 Internal Factors

90

80

70

60 50 40 Internal and External Factors Equal

30

20

10

0 External Factors


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About the authors Dr Mehmet Sıtkı I˙lkay graduated from Erciyes University Faculty of Economics and Administrative Sciences Department of Business Administration in 1984. He received his MBA degreefrom the Institute of Social Sciences at Erciyes University in 1987. He also received his MS degree in Industrial and Management Engineering from Rensealer Polytechnic Institute Graduate School in 1993. He received his PhD degree from the Institute of Social Sciences at Ankara University in 1996. He has been working as an Assistant Professor at Erciyes University. He has also been working as a consultant for manufacturing companies. Mehmet Sıtkı I˙lkay is the corresponding author and can be contacted at: [email protected] Emre Aslan graduated from Ege University, Faculty of Economics and Administrative Sciences Department of Business in 2004. He received his MBA degree from the Institute of Social Sciences at Erciyes University. He is working as a Research Assistant at the Department of Business in Gaziosmanpas¸a University and still ongoing with his Doctoral education at Erciyes University.

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