A CASE STUDY APPROACH TO THE ECONOMIC EVALUATION OF ISO 9001 CERTIFICATION

Transcription

1 A CASE STUDY APPROACH TO THE ECONOMIC EVALUATION OF ISO 9001 CERTIFICATION Paulo Sampaio 1*, Pedro Saraiva 2, António Guimarães Rodrigues 3 1*. Researcher, PhD, University of Minho, Production and Systems Department, Campus de Gualtar, Braga, Portugal, Phone: , paulosampaio@dps.uminho.pt 2. Associate Professor, University of Coimbra, Chemical Engineering Department, Pólo II Pinhal de Marrocos, Coimbra, Portugal. 3. Full Professor, University of Minho, Production and Systems Department, Campus de Gualtar, Braga, Portugal. Summary This paper presents the results obtained from studying the economic impact of quality management systems, based on the case study methodology. The sample of companies that we used comprises three companies that became ISO 9001 certified based on internal motivation, and three companies that have implemented their quality management system driven mostly by external motivation. Keywords ISO 9000, Economic-financial performance, Case study methodology. INTRODUCTION A number of studies have been carried out that try to relate the impact of quality management practices on organizational performance. The majority of them conclude that there is a positive relationship between the implementation of quality management practices and organizational performance improvement (Mann and Kehoe, 1994; Maani et al., 1994; Wisner and Eakins, 1994; Adam Jr. et al., 1997; Curkovic and Pagel, 1999; Terziovski and Samson, 1999; Gupta, 2000; Romano, 2000; Withers and Ebrahimpour, 2000, 2001; Lee et al., 2001; Singels et al., 2001; Boulter and Bendell, 2002; Dick et al., 2002; Ozgur et al., 2002; Tarí and Molina, 2002; Tarí and Sabater, 2004; Quazi and Jacobs, 2004). Gupta s (2000) results showed that ISO 9001 certified companies differed from non-certified ones on technological management, quality management control, causes of poor quality and quality control techniques used. Overall, in these categories, the usage mean values were higher for ISO 9001 companies. Romano (2000) has observed statistically significant improvements after certification, concerning quality performance in production and on the reliability of the production system and external quality performances. He also verified that non-quality costs diminished significantly after certification. Ozgur et al. (2002) observed that, for the majority of quality tools, the level of usage was higher for ISO 9001 certified firms. Concerning the services sector, Dick et al. (2002) have concluded that ISO 9001 certification makes a profound difference in the ways quality is perceived and measured.

2 Although the majority of the studies carried out state that there is a positive relationship between ISO 9001 certification and performance, there is a group of authors that did not find evidence of such a relationship (Terziovski et al., 1997; Quazi et al., 2002; Conca et al., 2004). Results obtained by Terziovski et al. (1997) showed that the presence or absence of ISO 9001 certification is a poor predictor of organizational performance and quality. Quazi et al. (2002) concluded that there was no statistically significant relationship between ISO 9001 certification status, quality management practices and quality results. There seems to be a strong relationship between companies certification motivations and resultant benefits. When firms are reacting to external pressure for certification, they may face ISO 9001 registration as the prime objective and adopt a minimalist approach to achieving it. Such firms obtain quality certification, but they may not fully value quality management systems, and thus will achieve limited benefits. According to Garvin (1984, cited in Sousa and Voss, 2002) the effect of quality on business performance (financial perspective) is based on two main routes: manufacturing and market. In the manufacturing route, improving internal process quality results in better operational performance that leads to business performance. In the market route, improvement of product quality will influence marketing business performance. According to Sousa and Voss (2002), quality management practices have a significant and strong impact on quality and operational performance. However, their impact on business performance is weaker and not always significant. Brust and Gryna (2002) stated that, in the following five economic areas, quality is of paramount importance: (1) exports competitive advantage; (2) national trade deficits; (3) economic growth; (4) productivity and customer satisfaction; (5) standardization. A systematic approach to quality improvement results in two key factors that drive financial performance: (1) it generates greater value for customers, building market share and revenues; (2) it lowers costs, increasing margins and asset usage (George, 2002). Despite all of the studies carried out in this area, the conclusions reached still have a contradictory nature. Some authors conclude that there is a positive relationship between ISO 9001 certification and companies financial improvement (Maani et al., 1994; Wisner and Eakins, 1994; LRQA, 1996; Chapman et al., 1997; Janas and Luczak, 2002; Lee et al., 2001; Beirão and Sarsfield Cabral, 2002; Nicolau and Sellers, 2002; Wayhan et al., 2002; Chow- Chua et al., 2003; Dimara et al., 2004; Naser et al., 2004). However, others do not find evidence of such a relationship (Adam Jr. et al., 1997; Kannan et al., 1999; Haversjo, 2000; Lima et al., 2000; Heras et al., 2001, 2002a, 2002b; Aarts and Vos, 2001; Corbett et al., 2002, 2005; Tsekouras et al., 2002; Martinez-Costa and Martinez-Lorente, 2003). Heras et al. (2001, 2002a, 2002b), regarding better financial performance presented by ISO 9001 certified companies, argued that: (1) one must consider the multitude of variables that influence or can influence a company s business performance; (2) it is important that the characteristics of the samples used are analysed in greater detail, because it is possible that higher profitability of the certified companies may have to do with the fact that certified firms belong to activity sectors that enjoy greater profitability levels; (3) higher profitability rates verified among ISO 9001 companies may be related to the most profitable companies, being those that have a greater propensity to be ISO 9001 certified.

3 Overall, no consistent evidence could be found in the literature concerning the real ISO 9001 impact on companies business performance, thus motivating the fieldwork that we decided to carry out. CASE STUDIES FOR ISO 9001 PERFORMANCE IMPACT EVALUATION We conducted six case studies, in order to analyse the impact of ISO 9001 on companies financial performance. Our goal was to reconstruct the economic-financial company history with the aim of identifying the benefits and costs directly related to their quality management systems. The time period analysed ranged from the year when the company decided to implement its quality management system up to the present (2007). Our case study methodology was split into three main phases. First we developed the framework that we would use in interviews. Then we tested the framework in order to validate and improve it, by making a pilot case study in a textile company. Finally, with a revised framework, we selected six companies for which we had previously identified what had been their most important ISO 9001 certification motivation, either internal or external. Thus, we selected three companies that became certified based mainly on external motivation, and another three companies that became certified based mostly on internal motivation. We tried to choose companies that belonged to the same industrial sector, but with different ISO 9001 motivations. However, that was not possible, since some of the selected companies declined to participate in the project. To have six companies willing to participate, we contacted 11 companies overall. These companies were chosen from a sample of 48 companies for which we were pretty sure about what was their most important ISO 9001 certification motivation (Sampaio et al., 2006, 2008, 2009). The external-motivation companies are from the following industrial sectors: Company A: EAC 12 Chemicals, chemical products and fibres. Company B: EAC 28 Construction. Company C: EAC 18 Machinery and equipment. The internal-motivation companies are from the following industrial sectors: Company D: EAC 18 Machinery and equipment. Company E: EAC 12 Chemicals, chemical products and fibres. Company F: EAC 4 Textiles and textile products. The interviews were performed with the companies quality managers, and for each of the companies we performed a qualitative analysis and a quantitative analysis. The qualitative analysis was performed on information collected during the interviews with the companies quality managers. In the quantitative analysis we asked the companies to characterize two different scenarios: the real one, with certification, and another one, without it, concerning the following financial indicators: Sales. Average price. Average production cost.

4 Quality management system implementation and maintenance costs. Using the previous set of financial indicators, we estimated the following indicator values: Operational Results Operational Results Difference Sales * (Average price Average production cost) Estimated Operational Results with ISO Estimated Operational Cost without ISO 9001 We asked the companies to define the above financial indicators on an annual basis, from the year of the decision to implement the quality management system, until The goal of our quantitative analysis was to verify if there was any variation in the Operational Results from the scenario with ISO 9001 certification as compared with the one without ISO 9001 certification. MAIN RESULTS OBTAINED Based on the developed work we were able to find that ISO 9001 certification motivations (internal or external ones) influence the derived benefits. We have also found out that companies motivations can influence the organization s involvement and commitment to the quality management system. In those companies that became certified based mainly on internal motivation, there is often the perception that all the organization is committed to the system. That is not the case when we talk about external motivation-driven companies. We would like to point out that the certified companies easily identified the costs related to their quality management systems. However, it was very difficult for the quality managers to quantify the direct profits (or cost reductions) associated with the quality management systems. Quality managers have the perception that the company s internal organization has improved, but they are not able to quantify how those improvements translate into economic benefits. Those companies that did present internal motivations have perceived higher benefits than those that became certified based on external motivations. However, in the externalmotivation companies it was easier to quantify increased profits and sales deriving from ISO 9001 certification. Concerning the costs related to quality management system implementation and maintenance, it is important to point out that the total amount is significantly higher for companies that had consultants helping to implement the systems. For the majority of the case studies we have concluded that companies are not able to support the fact that quality management system implementation does have a positive impact on companies economic-financial performance.

5 ACKNOWLEDGEMENTS The authors acknowledge financial support provided by Fundação para a Ciência e a Tecnologia (FCT) through PhD research grant (BD/16032/2004). REFERENCES [1] Aarts, F. and Vos, Ed (2001), The impact of ISO registration in New Zealand firms performance: a financial perspective, The TQM Magazine, 13(3), pp [2] Adam Jr., E., Corbett, L., Flores, B., Harrison, N., Lee, T., Rho, B., Ribera, J., Samson, D., Westbrook, R., (1997), An international study of quality improvement approach and firm performance, International Journal of Quality & Reliability Management, 17(9), pp [3] Beirão, G. and Sarsfield Cabral, J. (2002), The reaction of the Portuguese stock market to ISO 9000 certification, Total Quality Management, 13(4), pp [4] Boulter, L. and Bendell, T. (2002), How can ISO 9000:2000 help companies achieve excellence?, Measuring Business Excellence, 6(2), pp [5] Brust, P. and Gryna, F. (2002), Quality and Economics: five key issues, Quality Progress (October). [6] Chapman, R., Murray, P., Mellor, R. (1997), Strategic quality management and financial performance indicators, International Journal of Quality & Reliability Management, 14(4), pp [7] Chow-Chua, C., Goh, M., Boon Wan, T. (2003), Does ISO 9000 certification improve business performance?, International Journal of Quality & Reliability Management, 20(8), pp [8] Conca, F., Llopis, F., Tarí, J. (2004), Development of a measure to assess quality management in certified firms, European Journal of Operational Research, 156, pp [9] Corbett, C., Montes, M., Kirsch, D., Alvarez-Gil., M. (2002), Does ISO 9000 certification pay?, ISO Management Systems (July-August). [10] Corbett, C., Montes-Sancho, M., Kirsch, D. (2005), The financial impact of ISO 9000 certification in the US: an empirical analysis, Management Science, 51(7), pp [11] Curkovic, S. and Pagell, M. (1999), A critical examination of the ability of ISO 9000 certification to lead to a competitive advantage, Journal of Quality Management, 4(1), pp [12] Dick, G., Gallimore, K., Brown, J. (2002), Does ISO 9000 accreditation make a profound difference to the way service quality is perceived and measured?, Managing Service Quality, 12(1), pp [13] Dimara, E., Sakuras, D., Tsekouras, K., Goutsos, S. (2004), Strategic orientation and financial performance of firms implementing ISO 9000, International Journal of Quality & Reliability Management, 21(1), pp [14] Gupta, A. (2000), Quality management practices of ISO vs. non-iso companies: a case of Indian industry, Industrial Management & Data Systems, 100(9), pp [15] Haversjo, T. (2000), The financial effects of ISO 9000 registration for Danish companies, Managerial Auditing Journal, 15(1), pp

6 [16] Heras, I., Casadéus, M., Ochoa, C. (2001), Effects of ISO 9000 certification on companies profitability: an empirical study, 6 th International Conference on ISO 9000 and TQM, Ayr, Scotland. [17] Heras, I., Casadéus, M., Dick, G. (2002a), ISO 9000 certification and the bottom line: a comparative study of the profitability of Basque region companies, Managerial Auditing Journal, 17(1), pp [18] Heras, I., Dick, G., Casadéus, M. (2002b), ISO 9000 registration s impact on sales and profitability: a longitudinal analysis of performance before and after accreditation, International Journal of Quality & Reliability Management, 19(6), pp [19] Janas, I. and Luczak, H. (2002), Explorative study of the expected consequences for existing quality management systems due to the revision of ISO 9001 in certified companies in Germany, The TQM Magazine, 14(2), pp [20] Kannan, V., Tan, K., Handfield, R., Ghosh, S. (1999), Tools and techniques of quality management: an empirical investigation of their impact on performance, Quality Management Journal, 6(3), pp [21] Lee, C., Lee, T., Chang, C. (2001), Quality/productivity practices and company performance in China, International Journal of Quality & Reliability Management, 18(6), pp [22] Lima, M., Resende, M., Hasenclever, L. (2000), Quality certification and performance of Brazilian firms: an empirical study, International Journal of Production Economics, 66, pp [23] LRQA-Lloyd s Register Quality Assurance (1996), Fitter Finance: the effects of ISO 9000 on business performance (available at [24] Maani, K., Putterill, M., Sluti, D. (1994), Empirical analysis of quality improvement in manufacturing, International Journal of Quality & Reliability Management, 11(7), pp [25] Mann, R. and Kehoe, D. (1994), An evaluation of the effects of quality improvement activities on business performance, International Journal of Quality & Reliability Management, 11(4), pp [26] Martínez Costa, M. and Martínez Lorente, A. (2003), Effects of ISO 9000 certification on firms performance: a vision from the market, TQM & Business Excellence, 14(10), pp [27] Naser, K., Karbhari, Y., Mokhtar, M. (2004), Impact of ISO 9000 registration on company performance, International Journal of Quality & Reliability Management, 19(4), pp [28] Nicolau, J. and Sellers, R. (2002), The stock market s reaction to quality certification: empirical evidence from Spain, European Journal of Operational Research, 142, pp [29] Ozgur, C., Meek, G., Toker, A. (2002), The impact of ISO certification on the levels of awareness and usage of quality tools and concepts: a survey of Turkish manufacturing companies, Quality Management Journal, 9(2), pp [30] Quazi, H., Hong, C., Meng, C. (2002), Impact of ISO 9000 certification on quality management practices: a comparative study, Total Quality Management, 13(1), pp

7 [31] Quazi, H. and Jacobs, R. (2004), Impact of ISO 9000 certification on training and development activities, International Journal of Quality & Reliability Management, 21(5), pp [32] Romano, P. (2000), ISO 9000: what is its impact on performance?, Quality Management Journal, 7(3), pp [33] Sampaio, P., Saraiva, P., Guimarães Rodrigues, A. (2006), ISO 9001 certification research: a State-of-the-Art, Proceedings of the ASQ World Conference on Quality Improvement, Milwaukee, Wisconsin, USA, [34] Sampaio, P., Saraiva, P., Guimarães Rodrigues, A. (2008), ISO 9001 Audits: a Classification Algorithm, Proceedings of the ASQ World Conference on Quality Improvement, Houston, Texas, USA, [35] Sampaio, P., Saraiva, P., Guimarães Rodrigues, A. (2009), ISO 9001 certification research: questions, answers and approaches, International Journal of Quality & Reliability Management, 26(1), pp [36] Singels, J., Ruel, G., van de Water, H. (2001), ISO 9000 series: certification and performance, International Journal of Quality & Reliability Management, 18(1), pp [37] Sousa, R. and Voss, C. (2002), Quality management re-visited: a reflective review and agenda for future research, Journal of Operations Management, 20, pp [38] Tarí, J. and Molina, J. (2002), Quality management results in ISO 9000 certified Spanish firms, The TQM Magazine, 14(4), pp [39] Tarí, J. and Sabater, V. (2004), Quality tools and techniques: are they necessary for quality management?, International Journal of Production Economics, 92, pp [40] Terziovski, M., Samson, D., Dow, D. (1997), The business value of quality management systems certification: evidence from Australia and New Zealand, Journal of Operations Management, 15, pp [41] Terziovski, M. and Samson, D. (1999), The link between total quality management practice and organizational performance, International Journal of Quality & Reliability Management, 16(3), pp [42] Tsekouras, K., Dimara, E., Skuras, D. (2002), Adoption of a quality assurance scheme and its effect on firm performance: a study of Greek firms implementing ISO 9000, Total Quality Management, 13(6), pp [43] Wayhan, V., Kirche, E., Khumawala, B. (2002), ISO 9000 certification: the financial performance implications, Total Quality Management, 13(2), pp [44] Wisner, J. and Eakins, S. (1994), A performance assessment of the US Baldrige Quality Award Winners, International Journal of Quality & Reliability Management, 11(2), pp [45] Withers, B. and Ebrahimpour, M. (2000), Does ISO 9000 certification affect the dimensions of quality used for competitive advantage?, European Management Journal, 18(4), pp [46] Withers, B. and Ebrahimpour, M. (2001), Impacts of ISO 9000 registration on European firms: a case analysis, Integrating Manufacturing Systems, 12(2), pp

8 A Case Study Approach to the Economic Evaluation of ISO 9001 Certification Paulo Sampaio*, Pedro Saraiva**, A. Guimarães Rodrigues* * University of Minho; ** University of Coimbra 53rd EOQ Annual Congress Dubrovnik - Croatia Project was funded by a grant from Fundação para a Ciência e a Tecnologia (BD/16032/2004)

9 Session agenda Session learning objectives. Literature review. Methodology. Case studies. Main conclusions. 2/35

10 Session learning objectives (LO) 3/35

11 Learning objectives At the conclusion of this session, attendees should be able to get partial answers to the following questions: What is the real ISO 9001 certification impact over business financial performance? Are ISO 9001 quality organizations indeed more profitable and competitive than the others? Do companies that become certified base upon internal motivations achieve different results, also from a financial perspective, as compared to the ones that become certified base mostly on external motivations? 4/35

12 Literature review (LR) 5/35

13 The literature (1/3) Relationship between Quality Management Systems implementation / certification and business financial performance improvement. Results of a contradictory nature are reported! 6/35

14 The literature (2/3) Principal studies ( ) analyzing the effects on results of quality management implementation in Europe (Heras and Arana, 2006). Authors Haversjo (2000) Romano (2000) Casadesús et al. (2001) Merino (2001) Tarí and Molina (2002) Main conclusions Certified companies are more profitable than non certified companies, although certification does not seem to be the cause of the increase in profitability. ISO 9000 certification contributes to improving quality costs and production times, although it increases inspection costs. 65% of the companies obtained improvements, internal as well as external, following implementation of the ISO The profit-motivation relationship stands out, given that the companies certified for internal reasons obtain greater profits. There are significant activity sectors differences between QM practices and their influence on results. The companies reaching the highest indexes of QM implementation obtain the best results. Those companies that have put QM into practice have improved business results, client satisfaction, employee satisfaction and social impact. 7/35

15 The literature (3/3) Authors Gotzamani and Tsiotras (2002) Martínez-Lorente and Martínez-Costa (2002) Dimara et al. (2004) Lagrossen and Lagrossen (2005) Main conclusions In the opinion of the managers, ISO 9000 contributes to improve internal company organization and operating results. TQM has a positive effect on the operating results. However, the simultaneous application of ISO 9000 and TQM models cancel those positive effects. The financial results of certified and non certified companies are analyzed taking in account their strategic orientation, which is, in the end, the variable affecting company profitability. The results show that there is a correlation between the adoption of the values if TQM and successful QM. 8/35

16 Methodology (M) 9/35

17 Methodology (1/4) Methodology: Case study six companies. Goal: reconstruct the economic-financial companies history with the aim of identifying the benefits and costs directly related to the quality management system, since the QMS implementation year up to the present (2007). 10/35

18 Methodology (2/4) Phases Development of the framework used during the interviews. Pilot case study in order to validate and improve the framework. Revision of the framework based upon pilot case study feedback. Companies selection (three external motivation companies and three internal motivation ones). Case studies interviews with the companies quality managers. Notes In order to have six companies willing to participate, we have contacted 11 companies overall. These companies were chosen from a sample of 48 companies, for which we have previously indentified what was their most important ISO 9001 certification motivation (Sampaio et al., 2006, 2008, 2009). 11/35

19 Methodology (3/4) Case Studies Qualitative and Quantitative analyses. Qualitative analysis performed over information collected during the interviews with the companies quality managers. Quantitative the quality managers were asked to characterize two different scenarios, the real one, with certification, and an hypothetic scenario, without it, in terms of: - Sales. - Average price. - Average production cost. - QMS implementation and maintenance costs. 12/35

20 Methodology (4/4) Financial indicators analyzed Operational Results Sales * (Average price Average production cost) Operational Results Difference Estimated OR with ISO 9001 Estimated OR without ISO /35

21 Case studies (CS) 14/35

22 Case study A External Motivations (1/3) Company A, EAC 12 Chemicals, chemical products and fibers Qualitative analysis ISO 9001 motivations (1) company internationalization; (2) access to new foreign markets. Top management commitment decreased over time. ISO 9001 benefits (1) internal organizational improvements; (2) improvement of the NC identification and treatment processes; (3) access to new markets; (4) corporate image improvement; sales growth as a result of the QMS certification. The company is better organized than it was before ISO 9001 certification and the company best clients only become company clients after certification. 15/35

23 Case study A External Motivations (2/3) Quantitative analysis Operational Results Operational Results ( ) , , , , , , , , ,00 Implementation Certification , , , , , , ,00 QMS costs ( ) , ,00 QMS costs Operational Results w ith ISO 9001 Operational Results w ithout ISO /35

24 Case study A External Motivations (3/3) Quantitative analysis Operational Results Difference ,00 Operational Results Difference ( ) , , , ,00 0, , ,00 Implementation Certification /35

25 Case study B External Motivations (1/3) Company B, EAC 28 Construction Qualitative analysis ISO 9001 certification main motivation access to public contracts. The company internal organization significantly improved after the QMS implementation. However the quality manager was not able to quantify those improvements. The organization commitment and involvement decreased over time, with exception of the days before the audits take place. 18/35

26 Case study B External Motivations (2/3) Quantitative analysis Operational Results , ,00 Operational Results ( ) , , ,00 0, , , ,00 Implementation Certification , ,00 0, , ,00 QMS costs ( ) , ,00 QMS costs Operational Results w ith ISO 9001 Operational Results w ithout ISO /35

27 Case study B External Motivations (3/3) Quantitative analysis Operational Results Difference ,00 Operational Results Difference ( ) , , ,00 0, , , , ,00 Implementation Certification /35

28 Case study C External Motivations (1/3) Company C, EAC 18 Machinery and equipment Qualitative analysis The company became ISO 9001 certified because in the year 2000 it was fashion for companies to have a certified QMS. The QMS implementation process was extremely bureaucratic and the system maintenance costs were significantly higher for the reality of the company. The ISO 9001 benefits were not higher than the costs needed to maintain the QMS certified. The top management involvement with the system was very scarce. Company C was not able to quantify the economic benefits that have been derived from the system. However the costs directly related with the QMS were easily pointed out. 21/35

29 Case study C External Motivations (2/3) Quantitative analysis Operational Results Operational Results ( ) , , , , ,00 0, , , , ,00 Certification Implementation Certification withdrawn , , , ,00 0, , , ,00 QMS costs ( ) , ,00 QMS costs Operational Results w ith ISO 9001 Operational Results w ithout ISO /35

30 Case study C External Motivations (3/3) Quantitative analysis Operational Results Difference ,00 Operational Results Difference ( ) , , , , , , ,00 Certification Implementation Certification withdrawn 23/35

31 Case study D Internal Motivations (1/3) Company D, EAC 18 Machinery and equipment Qualitative analysis The company became certified with the aim of improving its internal organization. The company has the perception that its internal organization improved after the system implementation, but the quality manager was not able to quantify those improvements. All the organization is committed and involved with the QMS the quality manager belongs to the company top management. 24/35

32 Case study D Internal Motivations (2/3) Quantitative analysis Operational Results ,00 Implementation Certification , ,00 Operational Results ( ) , , , , , , , , , , , ,00 QMS costs ( ) , ,00 QMS costs Operational Results w ith ISO 9001 Operational Results w ithout ISO /35

33 Case study D Internal Motivations (3/3) Quantitative analysis Operational Results Difference Operational Results Difference ( ) 0, , , , , , , , , , Implementation Certification 26/35

34 Case study E Internal Motivations (1/3) Company E, EAC 12 Chemicals, chemical products and fibers Qualitative analysis The QMS was implemented mainly to achieve internal organizational improvements. However, the quality manager opinion is that, actually, ISO 9001 certification does not represent significant competitive advantages. Company E was not able to quantify the organizational improvements and translate them into economic benefits. 27/35

35 Case study E Internal Motivations (2/3) Quantitative analysis Operational Results 6.000,00 Operational Results ( ) Implementation Certification , ,00 0, , ,00 QMS costs ( ) ,00 QMS costs Operational Results w ith ISO 9001 Operational Results w ithout ISO /35

36 Case study E Internal Motivations (3/3) Quantitative analysis Operational Results Difference 6.000,00 Operational Results Difference ( ) 4.000, ,00 0, , , ,00 Implementation Certification 29/35

37 Case study F Internal Motivations (1/3) Company F, EAC 4 Textiles and textile products Qualitative analysis Company F became certified based upon a strategic decision of the top management in order to improve the company internal organization. The QMS is being used as a continuous improvement tool. The organization is committed with the QMS quality manager belongs to the company top management. The quality manager has the perception that the company internal organization improved as a result of the QMS implementation. However, he was not able to quantify the economic value of those improvements. 30/35

38 Case study F Internal Motivations (2/3) Quantitative analysis Operational Results Operational Results ( ) , , , , ,00 0, , , , ,00 Implementation Certification , , ,00 0, , ,00 QMS costs ( ) , ,00 QMS costs Operational Results w ith ISO 9001 Operational Results w ithout ISO /35

39 Case study F Internal Motivations (3/3) Quantitative analysis Operational Results Difference ,00 Operational Results Difference ( ) , , , , , ,00 0,00 Implementation Certification /35

40 Main conclusions (MC) 33/35

41 Main conclusions The internal motivations companies do present higher benefits perception, but they are not able to quantify how those improvements translate into economic benefits. In the external motivations companies it is easier to quantify increased profits and sales deriving from ISO 9001 certification. For the majority of the internal motivations companies that were analyzed there is often the perception that all the organization is committed with the system. This is not the case when we talk about external motivation driven companies. It is not unanimous that the certified companies would be less profitable if they had not implemented their QMS. We were not able to support the thesis that QMS implementation does have a positive impact over companies economic-financial performance. 34/35

42 Paulo Sampaio University of Minho, Portugal 35/35