The impact of contextual factors on the efficacy of ISO 9000 adoption

Chris K. Y. Lo, Frank Wiengarten, Paul Humphreys, Andy Yeung, T. C. E. Cheng

Research output: Contribution to journalArticle

38 Citations (Scopus)

Abstract

tThis study investigates the importance of contextual factors on the efficacy of ISO 9000 adoption. Weexplore the role of various contextual factors at the firm-level (i.e., technology intensity, labor produc-tivity, and labor intensity) and industry-level (i.e., industry efficiency level, industry competitiveness,industry sales growth, and industry ISO 9000 adoption level) that potentially impact the efficacy of ISO9000 adoption. We carry out a hierarchical linear modeling (HLM) analysis based on objective finan-cial data from 438 U.S. manufacturing firms. The results show that firms with low technology intensity,low labor productivity and high labor intensity reap more benefit from ISO 9000 adoption. Firms inindustries with low efficiency levels, high competition, high sales growth and low ISO 9000 adoptionlevels also obtain more benefit from the adoption. Our research provides supporting evidence for thecontext-dependent proposition of ISO 9000 adoption. Given the significant costs and resources involved,it is crucial for operations managers to assess to what extent ISO 9000 might benefit their performancebefore embarking on the implementation process.
LanguageEnglish
Pages229-235
JournalJournal of Operations Mangement
Volume31
Issue number5
DOIs
Publication statusPublished - Jul 2013

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Efficacy
Contextual factors
Industry
Labor intensity
Sales growth
Implementation process
Labour productivity
Costs
Competitiveness
Managers
Manufacturing firms
Resources
Hierarchical linear modeling

Cite this

Lo, Chris K. Y. ; Wiengarten, Frank ; Humphreys, Paul ; Yeung, Andy ; Cheng, T. C. E. / The impact of contextual factors on the efficacy of ISO 9000 adoption. In: Journal of Operations Mangement. 2013 ; Vol. 31, No. 5. pp. 229-235.
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title = "The impact of contextual factors on the efficacy of ISO 9000 adoption",
abstract = "tThis study investigates the importance of contextual factors on the efficacy of ISO 9000 adoption. Weexplore the role of various contextual factors at the firm-level (i.e., technology intensity, labor produc-tivity, and labor intensity) and industry-level (i.e., industry efficiency level, industry competitiveness,industry sales growth, and industry ISO 9000 adoption level) that potentially impact the efficacy of ISO9000 adoption. We carry out a hierarchical linear modeling (HLM) analysis based on objective finan-cial data from 438 U.S. manufacturing firms. The results show that firms with low technology intensity,low labor productivity and high labor intensity reap more benefit from ISO 9000 adoption. Firms inindustries with low efficiency levels, high competition, high sales growth and low ISO 9000 adoptionlevels also obtain more benefit from the adoption. Our research provides supporting evidence for thecontext-dependent proposition of ISO 9000 adoption. Given the significant costs and resources involved,it is crucial for operations managers to assess to what extent ISO 9000 might benefit their performancebefore embarking on the implementation process.",
author = "Lo, {Chris K. Y.} and Frank Wiengarten and Paul Humphreys and Andy Yeung and Cheng, {T. C. E.}",
note = "Reference text: ReferencesAaker, D.A., Day, G.S., 1986. The perils of high-growth markets. Strategic Manage-ment Journal 7 (5), 409–421.Akhavein, J.D., Berger, A.N., Humphrey, D.B., 1997. The effects of megamergers onefficiency and prices: evidence from a bank profit function. Review of IndustrialOrganization 12 (1), 95–139.Barber, B.M., Lyon, J.D., 1996. Detecting abnormal operating performance: theempirical power and specification of test statistics. Journal of Financial Eco-nomics 41 (3), 359–399.Benner, M.J., Tushman, M., 2002. Process management and technologicalinnovation: a longitudinal study of the photography and paint industries.Administrative Science Quarterly 47 (4), 676–706.Cole, R.E., 1998. Learning from the quality movement: what did and didn’t happenand why? California Management Review 41 (1), 43–73.Corbett, C.J., Montes-Sancho, M.J., Kirsch, D.A., 2005. The financial impact of ISO 9000certification in the United States: an empirical analysis. Management Science 51(7), 1046–1059.Das, A., Handfield, R.B., Calatone, R.J., Ghost, S., 2000. A contingent view of qual-ity management – the impact of international competition on quality. DecisionSciences 31 (3), 649–689. Dick, G., 2000. ISO 9000 certification benefits, reality or myth? The TQM Magazine12 (6), 365–371.Dixon, D., Eatock, J., Meenan, B.J., Morgan, M., 2006. Application of design of exper-iment (DOE) techniques to process validation in medical device manufacture.Journal of Validation Technology 12 (2), 92–100.Docking, D.S., Dowen, R.J., 1999. Market interpretation of ISO 9000 registration.Journal of Financial Research 22 (2), 147–160.Dunn and Bradstreet Information Services, 1996. The ISO 9000 Survey, Comprehen-sive Data and Analysis of Registered Companies in the United States and Canada.Irwin Publishing, Burr Ridge, Illinois.Ferguson, W., 1996. Impact of the ISO 9000 series standards on industrial marketing.Industrial Marketing Management 25 (4), 305–310.Fortune, 2009. Fortune 500 Top Industries: Most Profitable. In CNN Money’s onlinelisting retrieved from http://money.cnn.com/magazines/fortune/fortune500/2009/performers/industries/profits/assets.html (retrieved on 01.03.13).Hendricks, K.B., Singhal, V.R., 2000. Firm characteristics, total quality manage-ment, and financial performance. Journal of Operations Management 19 (3), 1–17.Hendricks, K.B., Singhal, V.R., 2008. The effect of product introduction delays onoperating performance. Management Science 54 (5), 878–892.Hill, T., 1993. Manufacturing Strategy: Text and Cases. Macmillan Press, London.ISO, 2011. The ISO survey of certifications–2011, available at: http://www.iso.org/iso/iso-surveyKetokivi, M., Schroeder, R., 2004. Strategic, structural contingency and institutionalexplanations in the adoption of innovative manufacturing practices. Journal ofOperations Management 22 (1), 63–89.Levine, D.I., Toffel, M.W., 2010. Quality management and job quality: how the ISO9001 standard for quality management systems affects employees and employ-ers. Management Science 56 (6), 978–996.McGuire, S.J., Dilts, D.M., 2008. The financial impact of standard stringency: an eventstudy of successive generations of the ISO 9000 standard. International Journalof Production Economics 113 (1), 3–22.Melville, N., Gurbaxani, V., Kraemer, K., 2007. The productivity impact of informationtechnology across competitive regimes: the role of industry concentration anddynamism. Decision Support Systems 43 (1), 228–242.Morris, P.W., 2006. ISO 9000 and financial performance in the electronics industry.The Journal of American Academy of Business 8 (2), 227–234.Naveh, E., Marcus, A., 2005. Achieving competitive advantage through implemen-ting a replicable management standard: installing and using ISO 9000. Journalof Operations Management 24 (1), 1–26.Park, A., Yang, D., Shi, X., Jiang, Y., 2010. Exporting and firm performance: Chineseexporters and the Asian financial crisis. The Review of Economics and Statistics92 (4), 822–842.Rogers, K., Purdy, L., Safayeni, F., Duimering, P., 2007. A supplier developmentprogram: rational process or institutional image construction? Journal of Oper-ations Management 25 (2), 556–572.Savin, N.E., White, K.J., 1977. The Durbin–Watson test for serial correlation withextreme sample sizes or many regressors. Econometrica 45 (8), 1989–1996.Sharma, D., 2005. The association between ISO 9000 certification and financialperformance. International Journal of Accounting 40 (2), 151–172.Sila, I., 2007. Examining the effects of contextual factors on TQM and performancethrough the lens of organizational theories: an empirical study. Journal of Oper-ations Management 25 (1), 83–109.Singh, P.J., Power, D., Chuong, S.C., 2011. A resource dependence theory perspec-tive of ISO 9000 in managing organizational environment. Journal of OperationsManagement 29 (1–2), 49–64.Sousa, R., Voss, C.A., 2008. Contingency research in operations management prac-tices. Journal of Operations Management 26 (6), 697–713.Sroufe, R., Curkovic, S., 2008. An examination of ISO 9000:2000 and sup-ply chain quality assurance. Journal of Operations Management 26 (4),503–520.Swink, M., Jacobs, B.W., 2012. Six Sigma adoption: operating performance impactsand contextual drivers for success. Journal of Operations Management 30 (6),437–453.Terlaak, A., King, A.A., 2006. The effect of certification with the ISO 9000 quality man-agement standard: a signaling approach. Journal of Behavior and Organization60 (4), 579–602.Wakelin, K., 2001. Productivity growth and R&D expenditure in UK manufacturingfirms. Research Policy 30 (7), 1079–1090.Zhang, D., Linderman, K., Schroeder, R.G., 2012. The moderating role of contextualfactors on quality management practices. Journal of Operations Management 30(1), 12–23.Zobel, B., 1984. The changing quality of the world wood supply. Wood Science andTechnology 18 (1), 1–17.",
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The impact of contextual factors on the efficacy of ISO 9000 adoption. / Lo, Chris K. Y.; Wiengarten, Frank; Humphreys, Paul; Yeung, Andy; Cheng, T. C. E.

In: Journal of Operations Mangement, Vol. 31, No. 5, 07.2013, p. 229-235.

Research output: Contribution to journalArticle

TY - JOUR

T1 - The impact of contextual factors on the efficacy of ISO 9000 adoption

AU - Lo, Chris K. Y.

AU - Wiengarten, Frank

AU - Humphreys, Paul

AU - Yeung, Andy

AU - Cheng, T. C. E.

N1 - Reference text: ReferencesAaker, D.A., Day, G.S., 1986. The perils of high-growth markets. Strategic Manage-ment Journal 7 (5), 409–421.Akhavein, J.D., Berger, A.N., Humphrey, D.B., 1997. The effects of megamergers onefficiency and prices: evidence from a bank profit function. Review of IndustrialOrganization 12 (1), 95–139.Barber, B.M., Lyon, J.D., 1996. Detecting abnormal operating performance: theempirical power and specification of test statistics. Journal of Financial Eco-nomics 41 (3), 359–399.Benner, M.J., Tushman, M., 2002. Process management and technologicalinnovation: a longitudinal study of the photography and paint industries.Administrative Science Quarterly 47 (4), 676–706.Cole, R.E., 1998. Learning from the quality movement: what did and didn’t happenand why? California Management Review 41 (1), 43–73.Corbett, C.J., Montes-Sancho, M.J., Kirsch, D.A., 2005. The financial impact of ISO 9000certification in the United States: an empirical analysis. Management Science 51(7), 1046–1059.Das, A., Handfield, R.B., Calatone, R.J., Ghost, S., 2000. A contingent view of qual-ity management – the impact of international competition on quality. DecisionSciences 31 (3), 649–689. Dick, G., 2000. ISO 9000 certification benefits, reality or myth? The TQM Magazine12 (6), 365–371.Dixon, D., Eatock, J., Meenan, B.J., Morgan, M., 2006. Application of design of exper-iment (DOE) techniques to process validation in medical device manufacture.Journal of Validation Technology 12 (2), 92–100.Docking, D.S., Dowen, R.J., 1999. Market interpretation of ISO 9000 registration.Journal of Financial Research 22 (2), 147–160.Dunn and Bradstreet Information Services, 1996. The ISO 9000 Survey, Comprehen-sive Data and Analysis of Registered Companies in the United States and Canada.Irwin Publishing, Burr Ridge, Illinois.Ferguson, W., 1996. Impact of the ISO 9000 series standards on industrial marketing.Industrial Marketing Management 25 (4), 305–310.Fortune, 2009. Fortune 500 Top Industries: Most Profitable. In CNN Money’s onlinelisting retrieved from http://money.cnn.com/magazines/fortune/fortune500/2009/performers/industries/profits/assets.html (retrieved on 01.03.13).Hendricks, K.B., Singhal, V.R., 2000. Firm characteristics, total quality manage-ment, and financial performance. Journal of Operations Management 19 (3), 1–17.Hendricks, K.B., Singhal, V.R., 2008. The effect of product introduction delays onoperating performance. Management Science 54 (5), 878–892.Hill, T., 1993. Manufacturing Strategy: Text and Cases. Macmillan Press, London.ISO, 2011. The ISO survey of certifications–2011, available at: http://www.iso.org/iso/iso-surveyKetokivi, M., Schroeder, R., 2004. Strategic, structural contingency and institutionalexplanations in the adoption of innovative manufacturing practices. Journal ofOperations Management 22 (1), 63–89.Levine, D.I., Toffel, M.W., 2010. Quality management and job quality: how the ISO9001 standard for quality management systems affects employees and employ-ers. Management Science 56 (6), 978–996.McGuire, S.J., Dilts, D.M., 2008. The financial impact of standard stringency: an eventstudy of successive generations of the ISO 9000 standard. International Journalof Production Economics 113 (1), 3–22.Melville, N., Gurbaxani, V., Kraemer, K., 2007. The productivity impact of informationtechnology across competitive regimes: the role of industry concentration anddynamism. Decision Support Systems 43 (1), 228–242.Morris, P.W., 2006. ISO 9000 and financial performance in the electronics industry.The Journal of American Academy of Business 8 (2), 227–234.Naveh, E., Marcus, A., 2005. Achieving competitive advantage through implemen-ting a replicable management standard: installing and using ISO 9000. Journalof Operations Management 24 (1), 1–26.Park, A., Yang, D., Shi, X., Jiang, Y., 2010. Exporting and firm performance: Chineseexporters and the Asian financial crisis. The Review of Economics and Statistics92 (4), 822–842.Rogers, K., Purdy, L., Safayeni, F., Duimering, P., 2007. A supplier developmentprogram: rational process or institutional image construction? Journal of Oper-ations Management 25 (2), 556–572.Savin, N.E., White, K.J., 1977. The Durbin–Watson test for serial correlation withextreme sample sizes or many regressors. Econometrica 45 (8), 1989–1996.Sharma, D., 2005. The association between ISO 9000 certification and financialperformance. International Journal of Accounting 40 (2), 151–172.Sila, I., 2007. Examining the effects of contextual factors on TQM and performancethrough the lens of organizational theories: an empirical study. Journal of Oper-ations Management 25 (1), 83–109.Singh, P.J., Power, D., Chuong, S.C., 2011. A resource dependence theory perspec-tive of ISO 9000 in managing organizational environment. Journal of OperationsManagement 29 (1–2), 49–64.Sousa, R., Voss, C.A., 2008. Contingency research in operations management prac-tices. Journal of Operations Management 26 (6), 697–713.Sroufe, R., Curkovic, S., 2008. An examination of ISO 9000:2000 and sup-ply chain quality assurance. Journal of Operations Management 26 (4),503–520.Swink, M., Jacobs, B.W., 2012. Six Sigma adoption: operating performance impactsand contextual drivers for success. Journal of Operations Management 30 (6),437–453.Terlaak, A., King, A.A., 2006. The effect of certification with the ISO 9000 quality man-agement standard: a signaling approach. Journal of Behavior and Organization60 (4), 579–602.Wakelin, K., 2001. Productivity growth and R&D expenditure in UK manufacturingfirms. Research Policy 30 (7), 1079–1090.Zhang, D., Linderman, K., Schroeder, R.G., 2012. The moderating role of contextualfactors on quality management practices. Journal of Operations Management 30(1), 12–23.Zobel, B., 1984. The changing quality of the world wood supply. Wood Science andTechnology 18 (1), 1–17.

PY - 2013/7

Y1 - 2013/7

N2 - tThis study investigates the importance of contextual factors on the efficacy of ISO 9000 adoption. Weexplore the role of various contextual factors at the firm-level (i.e., technology intensity, labor produc-tivity, and labor intensity) and industry-level (i.e., industry efficiency level, industry competitiveness,industry sales growth, and industry ISO 9000 adoption level) that potentially impact the efficacy of ISO9000 adoption. We carry out a hierarchical linear modeling (HLM) analysis based on objective finan-cial data from 438 U.S. manufacturing firms. The results show that firms with low technology intensity,low labor productivity and high labor intensity reap more benefit from ISO 9000 adoption. Firms inindustries with low efficiency levels, high competition, high sales growth and low ISO 9000 adoptionlevels also obtain more benefit from the adoption. Our research provides supporting evidence for thecontext-dependent proposition of ISO 9000 adoption. Given the significant costs and resources involved,it is crucial for operations managers to assess to what extent ISO 9000 might benefit their performancebefore embarking on the implementation process.

AB - tThis study investigates the importance of contextual factors on the efficacy of ISO 9000 adoption. Weexplore the role of various contextual factors at the firm-level (i.e., technology intensity, labor produc-tivity, and labor intensity) and industry-level (i.e., industry efficiency level, industry competitiveness,industry sales growth, and industry ISO 9000 adoption level) that potentially impact the efficacy of ISO9000 adoption. We carry out a hierarchical linear modeling (HLM) analysis based on objective finan-cial data from 438 U.S. manufacturing firms. The results show that firms with low technology intensity,low labor productivity and high labor intensity reap more benefit from ISO 9000 adoption. Firms inindustries with low efficiency levels, high competition, high sales growth and low ISO 9000 adoptionlevels also obtain more benefit from the adoption. Our research provides supporting evidence for thecontext-dependent proposition of ISO 9000 adoption. Given the significant costs and resources involved,it is crucial for operations managers to assess to what extent ISO 9000 might benefit their performancebefore embarking on the implementation process.

U2 - 10.1016/j.jom.2013.04.002

DO - 10.1016/j.jom.2013.04.002

M3 - Article

VL - 31

SP - 229

EP - 235

JO - Journal of Operations Management

T2 - Journal of Operations Management

JF - Journal of Operations Management

SN - 0272-6963

IS - 5

ER -