ارتباط بین صدور گواهینامه ایزو 9000 و عملکرد مالی
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|5945||2005||22 صفحه PDF||سفارش دهید||9060 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : The International Journal of Accounting, Volume 40, Issue 2, Summer 2005, Pages 151–172
This study explores the association between ISO 9000 certification and financial performance at the organizational level in a mature quality initiative market. It extends the limited literature on quality initiatives and objective measures of financial performance. The study hypothesizes that ISO 9000 certification is associated with improvements across three dimensions of financial performance. These dimensions are operating efficiency, growth in sales, and overall financial performance. These dimensions of performance are measured using profit margin, growth in sales, and earnings per share, respectively. Based on data for a sample of 70 companies listed on the Singapore Stock Exchange over a 6-year period, the results of the study are consistent with the hypothesized effects. In particular, the results show that the extent of improvement is driven largely by operating efficiencies and suggests that firms can benefit from ISO 9000 certification if they are genuinely interested in the quality philosophy by improving their internal business processes.
Quality management initiatives such as total quality management (TQM) and just-in-time systems (JIT) are receiving growing attention in management accounting textbooks. However, the effect of such initiatives on financial performance has received little attention in academic research. This is probably because much of the research on quality and self-reported non-financial firm performance measures are located in the quality management paradigm. Noting the lack of studies on quality initiatives generally, Maher (1995) urged accounting researchers to undertake a time-series exploration of the effects of quality initiatives on organizational performance. However, such research remains scarce in the accounting discipline. Ittner and Larcker (1995) were among the first management accounting researchers to study the effect of quality management practices on organizational performance. Balakrishnan, Linsmeir, and Venkatachalam (1996) and Kinney and Wempe (2002) investigated the financial impact of JIT systems. Most recently, Nagar and Rajan (2001) studied the relationship between financial and non-financial indicators of quality and future sales. However, it is not easy to establish an empirical relationship between the adoption of quality initiatives such as TQM and JIT and firm performance that are measured by accounting variables. The difficulty of establishing an empirical relationship between TQM and JIT initiatives on firm performance stems from determining the objectivity of the extent of adoption, the validity of the adoption claims by the firm, and identifying an adoption date. Easton and Jarrell (1998, p. 256) describe the problem in the context of TQM as follows: First, whether or not a firm has seriously pursued TQM cannot be determined by relying on the firm's public announcements. Many firms claim to be implementing TQM when, in fact, they have made essentially no changes (other than in their public rhetoric)…. Second, firms seldom publicly announce the beginning of the deployment of their TQM systems. In fact, there is often no completely unambiguous start date. The purpose of this research is to investigate the association between International Organization for Standardization 9000 (ISO 9000) certification and financial performance at the organizational level. A study of the effect of ISO 9000 certification on financial performance alleviates the limitations of prior studies because the certification process requires compliance with the elements of the ISO 9000 standards. The certification process is conducted by an approved independent ISO 9000 registrar. If a firm meets the ISO 9000 standards following an audit by a registrar, the firm is issued an ISO 9000 certificate that includes the scope of certification and the effective date. While certificates are typically issued for 3-year periods, compliance review is performed every 6 months. Although ISO 9000 certification has been globally pursued and implemented, very few studies have explored its impact on objective measures of financial performance. The literature abounds with studies examining the effect of ISO 9000 certification on self-rated performance measures such as product quality, defects, employee satisfaction, employee turnover, customer satisfaction, supplier quality, and productivity, to name a few. While such studies add to our knowledge about the effects of ISO 9000 certification and quality systems on performance, the use of self-rated performance measures is not independent, suffers from self-reporting bias, and, thus, presents limitations. The implications of self-rated measures are well recognized in the management accounting literature. Moreover, the phenomenal growth in the number of companies attaining ISO 9000 certification worldwide suggests certification will yield benefits to the firm.1 The benefits appear to have been realized because, as noted previously, the literature is replete with self-rated benefits of ISO 9000 certification. However, whether ISO 9000 certification is associated with more objective measures of performance remains an empirical issue. If ISO 9000 certification is not positively associated with financial performance, it may possibly lose credibility and be regarded as another management fad. It is conceivable that the self-rated benefits are a self-fulfilling prophecy. Juran (1999), one of the pioneers of quality concepts, is quite pessimistic about ISO 9000 and has called for research demonstrating the financial benefits of the costly ISO 9000 certification process. This study fills the current void in the literature and addresses an important policy and strategic issue. Specifically, I investigate the extent to which ISO 9000 certification improves financial performance at the organizational level and make the following contributions. First, I use financial performance measures derived from audited financial statements. Prior literature investigating ISO 9000 effects has focused on self-rated measures of performance that suffer from inherent bias. Second, prior studies have largely investigated differences in performance between firms with ISO certification and those without in the post-ISO period. I extend this literature by providing evidence on ISO 9000 certification and the extent of improvement in financial performance. I investigate the financial performance of firms based on data 3 years prior to and 3 years after ISO 9000 certification. I also employ a benchmark of matched-control firms that never pursued ISO 9000 certification either in the period of study or 3 years thereafter. This is the most important contribution of the study as it provides an objective assessment of the impact of ISO 9000 certification on performance. Third, I study a range of industries. I do not restrict my sample to manufacturing firms for the simple reason that ISO 9000 certification is a non-industry specific standard. The ISO Survey of ISO 9000 lists 39 industries from which companies have attained certification, yet studies confine their analysis to the manufacturing industry.2 However, I test the sensitivity of my results to industry membership and find that the results relating to the effects of ISO 9000 certification on performance is not affected by industry membership. Fourth, I study the certification effect on performance in an emerging market (Singapore) where the quest for gaining global competitive advantage both within the region and against firms from developed nations such as Japan, the United Kingdom and the United States is intense. An emerging market is also studied because there is very little evidence on quality initiatives outside the major markets such as Japan, the United Kingdom and the United States (Low, Tan, & Ang, 1999). As multinational corporations shift their manufacturing processes to developing nations, such as those in Asia, studying emerging markets becomes even more critical. In concert, suppliers in emerging markets are facing increasing pressure from their global customers in the major markets to provide the highest quality goods and services (Chan, 2000 and Quazi et al., 2002). ISO 9000 certification is a global recognition of achieving high and consistent quality standards. Finally, Singapore, as a mature ISO certified nation, provides a suitable context for investigating whether ISO certification is associated with higher financial performance.3 In non-mature ISO contexts, the “first mover” to attain certification might experience gains due to visibility rather than to improvements in its internal business processes. In a mature ISO context, where most firms are ISO certified and competition is intense, superior performance would demand genuine improvements to internal processes visible to customers through higher quality products and value-for-money prices. The analysis, based on 384 firm-years of data derived from 70 companies listed on the Singapore Stock Exchange over a 6-year period revealed that the financial performance of firms achieving certification was significantly greater than non-certified firms. More importantly, the results indicated that ISO 9000 certification was associated with significant improvements in financial performance; the control-firm adjusted performance in the post-ISO 9000 certification period was significantly greater than that in the pre-ISO 9000 certification period. The results are robust to sensitivity and selection-bias tests. These results imply that ISO 9000 certification possesses economic significance and firms can enhance performance through certification. However, the analysis shows that the increase in performance is attributable largely to improvements in operating efficiency and, to a lesser extent, growth in revenue. Gains in performance arise, therefore, if firms are genuine in their ISO 9000 implementation process. The results and more critically the design of the study assist in explaining inconsistencies in the literature. As with studies of this nature, the results and inferences drawn ought to be considered in context and with regard to the limitations of the study as discussed in the concluding section of the paper. The next section provides the background on ISO 9000 certification and discusses the relevant literature. The research hypotheses are articulated next followed by the research method. The final two sections present the results and conclude the study.
نتیجه گیری انگلیسی
This study sought to investigate whether ISO 9000 certification is associated with financial performance measures at the organizational level. The study makes several contributions to the literature. First, using a sample of 35 ISO 9000 certified firms across a range of industries and 35 non-ISO certified companies matched on size and industry, I investigated whether ISO certification was associated with improvements (as opposed to differences between ISO and non-ISO firms at a point in time) in objective measures of financial performance such as EPS, Profit Margin, and Growth in Sales. I employed an appropriate design that permitted investigating the extent of improvement in performance following ISO certification. Second, the relationship between ISO 9000 certification and performance was investigated in an emerging market that had a mature ISO outlook. A mature ISO context enabled me to study the real benefits of ISO 9000 certification arising from improvements to the internal business processes rather than due to a “first mover” effect. In doing so, this study provides the first reliable evidence of the impact of ISO 9000 certification on financial performance at the organizational level. The results of this study provide evidence that ISO 9000 certification is associated with improvements in financial performance. They suggest that ISO 9000 certification does bring benefits to the firm and its stakeholders. Specifically, the multivariate tests showed that ISO 9000 certification is associated with significant improvements in profit margin, growth in sales, and earnings per share. However, the effect of ISO 9000 certification was greater on profit margin than on growth in sales. This suggests that the improvement in overall performance is attributed largely to improvements in internal business processes. Thus, in a mature ISO context such as Singapore, ISO 9000 certification appears to affect firm performance through internal sources focused on improving quality-related processes. It appears from the data analyzed in this study that ISO 9000 could be an important strategic initiative because it does impact the bottom line through enhancements to internal business processes. Firms not certified but considering ISO 9000 certification are likely to benefit financially from attaining ISO status. Finally, the evidence here also suggests that ISO 9000 has credibility and supports the literature on the self-rated benefits of ISO 9000. There are a few limitations in this study. First, the results of this study are not generalizable to non-listed companies and SMEs. Future research could consider such companies because they play major roles in world economies. However, data availability is likely to limit such investigations. Second, I cannot rule out the possibility that other variations in firm characteristics and endogenous factors influenced the observed performance differences.9 More complex and intricate models are required to explore such effects and are left to future research. Third, due to the lack of objective and sufficient information, the study did not examine other financial measures such as inventory turnover, cost of goods manufactured/services provided, and internal and external failure costs that could more directly capture the effects of ISO 9000 certification. Other financial performance measures such as EVA could be considered. Future research could investigate the causal effects of ISO certification on non-financial measures and consequently on financial measures. Fourth, the period of the study was one where Singapore companies implemented other quality initiatives such as JIT, total quality management, and cellular manufacturing technology. The extent to which these practices varied between the ISO and non-ISO certified companies and within the ISO certified firms could not be determined. Therefore, the results of the study must be interpreted cautiously. Future research could explore the effect of quality initiatives and ISO certification on financial performance. Finally, no attempt was made to investigate the effect of types of ISO 9000 certification on performance due to limited information and the small sample size. This is another issue that could be explored in future research.