The effect of the ISO 9001 quality management system on the performance of SMEs
Mehmet S#tk# #lkay Emre Aslan
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To cite this document:
Mehmet S#tk# #lkay Emre Aslan, (2012),"The effect of the ISO 9001 quality management system on the
performance of SMEs", International Journal of Quality & Reliability Management, Vol. 29 Iss 7 pp. 753 -
778
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Quality
The effect of the ISO 9001 quality management
management system on the system
performance of SMEs
753
Mehmet Sıtkı İlkay
Department of Business Administration, Erciyes University, Received 22 December 2010
Kayseri, Turkey, and Revised 28 March 2011
Accepted 27 September 2011
Emre Aslan
Department of Business Administration, Gaziosmanpaşa University,
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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,
motivations for certification and companies’ quality practices have been considered as factors. A survey
was carried out with 255 small to medium-sized enterprises (SMEs) in Turkey. The differences between
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 results showed no statistically significant difference between certified and
non-certified companies in terms of performance. Certification showed no direct effect 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 internally motivated for certification have partially higher performance than companies
externally motivated.
Originality/value – To the authors’ knowledge, this is the first study 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 be considered in a systematic way and quality of the system should be emphasized
rather than quality of the product. When a system is implemented that depends on
processes that provide good quality goods and services and that continuously improves
under changing conditions the output of the system also results in improved consistent
quality. International Journal of Quality
The most widely used method for implementing a system of this kind is the ISO & Reliability Management
Vol. 29 No. 7, 2012
9000 quality management systems standards. This standard proposes practices pp. 753-778
for companies to meet customer and legal requirements in a systematic way. It is q Emerald Group Publishing Limited
0265-671X
important to ensure a continuous and standardized approach to the concept quality. DOI 10.1108/02656711211258517
IJQRM ISO 9000 is a quality management system standard used by many organizations
29,7 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.
754 ISO 9000 standards provide an institution with well-documented procedures to
follow in providing goods and services. These procedures define how the 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
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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 Quality
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
management
(Gustafsson et al., 2001, p. 234). Depending on existing quality practices, small and even system
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. 755
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
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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 only certified companies did not compare them with non-certified companies
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.
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 one research was found about the negative effects of ISO 9000 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 when certified and non-certified companies have been compared in 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 fell behind the non-certified companies (Martinez-Costa and Martinez-Lorente, 2007).
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 et al.,
1998, p. 284). Companies motivated for certification by customer pressure 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).
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,
IJQRM efficient quality management which improves with quality control will decrease defects
29,7 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
762 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 ANOVA was used to
determine the differences between the SMEs’ level of quality applications and performance.
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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 ¼ 255
f %
Food 22 8.6
Metal industry/metal works 30 11.8
Machinery, equipment 45 17.6
Textiles 22 8.6
Electricity, electronics 24 9.4
Construction, structure and products 23 9.0
Chemical/oil 13 5.1
Plastic, paper, packaging 14 5.5
Automotive and automotive supply industry 21 8.2
Table I. Furniture, wood work, wood products 18 7.1
Sectoral distribution Services 15 5.9
of companies Other 8 3.1
As seen in Table III, 43.5 percent of companies who answered the survey were ISO 9001 Quality
certified, 42.7 percent of the companies were not ISO 9001 certified and 13.7 percent of the management
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 system
the questionnaire were very close to each other.
4.3 Hypotheses
H0. 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 ¼ 255
f %
Table II.
1-9 employees 104 40.8 Size of responding
10-49 employees 85 33.3 companies by number
50-249 employees 66 25.9 of employees
n ¼ 255
f %
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, H0 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 ¼ 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 ¼ 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 ¼ 0.000).
H0 was therefore, rejected. We found statistically significant differences in the 0.01
level of significance in the subsections “top management leadership” ( p ¼ 0.004),
“quality system processes” ( p ¼ 0.000), “supplier relations” ( p ¼ 0.000),
IJQRM
Average of ISO 9001 Average of non-
29,7 certified (n ¼ 111) certified (n ¼ 109) p
100 90 80 70 60 50 60 70 80 90 100
Figure 1.
100 90 80 70 60 50 40 30 20 10 0
Scale of motivation
Internal Internal and External External factors for certification
Factors Factors Equal Factors
IJQRM factors were equal, were excluded. Motivation factors for certification were asked, and
29,7 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
768 expected to have a quality practice level higher than externally motivated companies.
A statistically significant difference was not found between internally and externally
6. Conclusion
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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.
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 especially at turnover and market share.
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 practice and performance
(r ¼ 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.
In conclusion, a direct relation could not be found between ISO 9001 certification and Quality
performance. The explanatory power of a model proposing a direct relationship between management
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 system
non-certified. Also quality practices and performance were correlated. 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 771
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
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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 this study, motivation factors for certification and quality practices were considered
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 for further researches. Also new researches may focus on the reasons why no
improvement is observed on some subjects, while expected.
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IJQRM Appendix. Survey questions
29,7
1.1 Quality Practices
Strongly Strongly
Disagree Disagree Neutral Agree Agree
Top Management Leadership
776 In our company top management provides the O O O O O
resources to quality-related activities
Our company has a quality policy created by top O O O O O
management
In our company measurable quality objectives are O O O O O
established on the basis of business units
In our company top management regularly review O O O O O
quality related activities
Customer Orientation
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100 90 80 70 60 50 40 30 20 10 0
Internal Internal and External External
Factors Factors Equal Factors
IJQRM About the authors
Dr Mehmet Sıtkı İlkay graduated from Erciyes University Faculty of Economics and
29,7 Administrative Sciences Department of Business Administration in 1984. He received his
MBA degree from 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.
778 He has also been working as a consultant for manufacturing companies. Mehmet Sıtkı İlkay is the
corresponding author and can be contacted at: ilkay@erciyes.edu.tr
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 Gaziosmanpaşa University and still ongoing with his Doctoral education at
Erciyes University.
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