International Journal of Production Research,

2006, 131, preview article

A study on the critical factors of ISO 9001:2000 and organizational

performance of Indian manufacturing firms
P. PADMA, L. S. GANESH and C. RAJENDRAN*
Department of Management Studies, Indian Institute of Technology Madras,
Chennai-600036, India

(Revision received April 2006)

This study explores the critical factors of ISO 9001:2000 and investigates the
effect of ISO certification on organizational performance, as perceived by the
management. In order to gain more insight into the investigation, the study also
analyses the relationship between the firm attributes and the critical factors,
as well as the relationship between firm attributes and the indicators of
organizational performance.
Keywords: ISO 9001:2000; Quality management system; Critical factors;
Indicators of organizational performance; Firm attributes

1. Introduction
The pursuit of quality is one of the most exciting and rewarding endeavours in
todays business. As a result, many organizations have introduced and steadily
improved upon their quality systems, compelled by the demands placed on them by
markets and the nature of competition. Total quality management (TQM) is defined
as both a philosophy and a set of guiding principles that serve as the foundation of a
continuously improving organization. As the origin of quality management had its
roots in the manufacturing industry, the subject of quality management has been
viewed largely from the manufacturing perspective. Several works (e.g. Flynn
et al. 1994, Joseph et al. 1999) have thoroughly investigated various dimensions,
techniques and organizational requirements for effective implementation of TQM
in the manufacturing sector.
ISO 9001:2000 is a standard for quality management systems (QMS). QMS based
on ISO 9001:2000 provide a sound foundation on which TQM programmes can be
built. It has been widely acclaimed that ISO 9001:2000 is a first big step in a TQM
programme, as implementing ISO 9001:2000 helps to pave the way for continual
improvement. Mo and Chan (1997) emphasized that small firms need to ascertain the
gap between their current situation and the requirements for success before starting
the QMS certification process, as the implementation requires a more cost-effective
and well-planned approach. Gotzamani and Tsiotras (2001) concurred with

*Corresponding author. Email: craj@iitm.ac.in

International Journal of Production Research
ISSN 00207543 print/ISSN 1366588X online 2006 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/00207540600793299

P. Padma et al.

Yung (1997), and suggested that the ISO 9000 could be a good first step towards
TQM. Karaszewski and Karaszewski (2002) studied the implementation of ISO
9001:2000 and TQM in Polish industries in all sectors. Cerio (2003) concluded from a
survey of Spanish firms that there existed a significant relationship between the level
of implementation of quality management practices and improvement in operational
performance in terms of cost, quality and flexibility. Yeung et al. (2003) found that
the ineffectiveness of ISO 9001:2000 is largely due to incorrect management
objectives and expectations from the standard. Naveh et al. (2004) indicated that
learning is a more important factor in explaining ISO 9000 performance than timing.
They asserted that both the first and second movers achieved a high level of
performance through ISO 9000 certification, provided they had learned from
experience of their own or others. Mahadevappa and Kotreshwar (2004) indicated
that adopting ISO 9000 contributed to better quality performance of the firms,
measured by reduction in defects, rework, customer complaints, etc. Arauz and
Suzuki (2004) found that motivation for certification, implementation process,
maintenance activities, and existing quality measures significantly influenced the
performance of ISO 9001:2000 in Japan.
Naveh and Marcus (2005) found that ISO 9000 certification alone did not
provide a competitive edge, and emphasized that the standard should be adhered
to in the firm through an external coordination with suppliers and customers and
integration with existing practices of the company. Morris (2006) found that the link
that existed between ISO 9000 certification and financial performance to be poor in
the electronics industry and the results might be attributed to the nature of the
sample and hypotheses. Swami and Balaji (2006) showed that there is a significant
difference between firms with and without ISO 9000 certification with respect to the
human resources management practices and advanced technology, and that ISO
9000 certified firms adopt innovative technologies.

2. Findings from the literature review

There have been various studies relating to the implementation of total quality
management (TQM) and several frameworks leading to TQM. Researches related
to ISO-9000-series quality management system (QMS), and ISO-14000-series
environmental management system (EMS) have been carried out. Many authors
have reported the advantages and demerits of, motivation for, and issues in ISO
certification across the series of standards (Mo and Chan 1997, Gotzamani and
Tsiotras 2001, Pun 2001, Yeung et al. 2003). Studies investigating the relationships
between quality certification and quality management practices, and quality
certification, and financial and operational performance have also been carried out
(see Terziosvski and Samson 1999, Agus et al. 2000, Sureshchandar et al. 2001,
Cerio 2003, Issac et al. 2004). Arauz and Suzuki (2004) studied the factors affecting
the performance of ISO 9000 standard. Naveh and Marcus (2005), and Swami and
Balaji (2006) studied the performance of firms with and without ISO 9000
certification. It appears that the existing works have not explored the critical factors
of the ISO systems and their influence on firm performance. Hence, the current study
first explores the key factors of the ISO 9001:2000 series of standards, and then,
the effect of certification on organizational performance.

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

3. Research objectives
The objectives of this study are to:
1. Determine the levels of presence of the critical factors (CFs) and indicators of
organizational performance (IOPs) in a sample of ISO 9001:2000 certified
firms in India, and also the changes in the CF and the IOPs levels following
the implementation of the QMS.
2. Examine the effect of implementing ISO 9001:2000 on the CFs and the IOPs.
3. Analyse the relationships between the firm attributes and the CFs, and the
relationships between the firm attributes and the IOPs.
The CFs are essentially input variables that are within the overall control of
the organizations. In contrast, the IOPs can be regarded as output variables that
describe the performance of the firms on various aspects, particularly due to
implementation of QMS. These variables have been selected following the literature
review and discussions held with executives in the sample firms. To achieve these
objectives a questionnaire survey (presented in the Appendix) was conducted during
20022004 from a sample of ISO 9001:2000 certified firms in India to gather
practitioners perceptions on various aspects of the CFs and organizational
performance. A detailed discussion on the CFs and the IOPs is presented below.
3.1 CFs in the current study
The following are identified as the CFs for the successful implementation of QMS
in the manufacturing industry:
.
.
.
.
.
.

Top management commitment.

Customer focus.
Quality process management.
Continuous improvement.
Measurement, monitoring and control.
Human resources management.

A discussion on these critical factors is now presented.

3.1.1 Top management commitment (TMC). Top Management should establish
unity of purpose and direction of the organization by creating and maintaining an
internal environment in which people can become fully involved in achieving the
organizations objectives. It is emphasized that without the total involvement of top
management, all quality efforts might fail (Ahire 1996, Sureshchandar et al. 2001). In
the ISO 9001:2000, it is stated that management responsibility and commitment are
required to communicate the importance of meeting customer requirements, frame a
quality policy, establish quality objectives, and ensure availability of resources. These
standards consider top management commitment as paramount to the growth of an
organization (Clause 5Management Responsibility, ISO 9001:2000).
3.1.2 Customer focus (CuF). Quality is defined as conformance to customers
requirements. The crux of Demings (1986) 14 points on quality management

P. Padma et al.

emphasizes customer satisfaction. The customers perception of quality plays a vital

role in customer satisfaction, which in turn affects quality management (Anderson
et al. 1994). Though not explicit, this element of quality is often referred to in the
ISO 9001:2000 standards (Process approachClause 2.4, ISO 9001:2000).
3.1.3 Quality process management (QPM). Process management ensures that a
process is worked without failure in spite of variations in workforce (Flynn et al.
1994). Smith (1995) explained that understanding, design and control of business
processes would be necessary for business improvement. In service quality,
enhancement of technological capability is very essential in service delivery
(Sureshchandar et al. 2001). ISO 9001:2000 mandates an organization to identify
the processes needed for quality management and their application throughout the
organization. Furthermore, there are many clauses in the ISO 9001:2000 standards
pertaining to process management (viz., documentation requirements4.2, control
of documents4.2.3, design and development7.3). These clauses best describe the
essentiality of QPM.
3.1.4 Continuous improvement (CI). Deming (1986), in his quality philosophy,
reiterated the importance of continuous improvement. Attainment of world-class
goals is only possible by continuous improvement in all aspects of performance
(Spenley 1994). Firms need to focus on their long-term goals by continuously
improving their processes. ISO 9001:2000 emphasizes on continuous improvement of
processes by requiring that management should improve the effectiveness of QMS
through the use of quality policies, quality objectives, audit results, data analysis,
corrective and preventive actions and management review (Clause 8.5.1, ISO
9001:2000Continual Improvement).
3.1.5 Measurement, monitoring and control (MMC). Quality cannot be improved
until it is measured. Statistical techniques are an essential component of ISO
9001:2000, which delineates the importance of measuring quality. Ahire (1996)
asserted that translating customer needs into actions requires discreet use of tools
such as quality function deployment (QFD). In his statistical theories of process
variation, Shewart (1931) underscored the importance of methodologically controlling organizational processes. Monitoring and measurement form an essential part of
ISO 9001:2000 standards. They require an organization to establish processes for
monitoring the conformity of products to specified requirements, and recommend
the use of statistical techniques to monitor processes (Clause 8Measurement,
Analysis and Improvement, ISO 9001:2000).
3.1.6 Human resources management (HRM). People at all levels in an organization
should be effectively managed in order to build a work environment conducive to
personal and organizational growth, and to utilize their full potential in line with a
firms objectives. Schneider and Bowen (1992) stated that only if employers treat
employees as valuable resources would they in turn treat their customers as valuable.
Hence it becomes imperative for firms to consider human resources management
as a source of competitive advantage (Sureshchandar et al. 2001). ISO 9001:2000

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

standards state that personnel performing work affecting product quality should
receive adequate training and skills. Other elements of human resources like
communication and work environment are also dealt with appropriately in the
standards (Clause 6.2Human Resources, ISO 9001:2000).
3.2 IOPs identified in the current study
Performance indicators of a firm quantitatively represent various firm-related and
market related aspects of its products, services, resources, and productivity. They
provide data about how well a company performs, potential areas of improvement,
the gap between the firms results and goals, and are used to determine if the
processes are under control and if customers are satisfied. From the literature review,
widely used IOP that satisfy these objectives for ISO 9001:2000 certified firms are
found to be as follows:
.
.
.
.
.
.
.
.
.
.
.
.

Customer satisfaction.
Employee morale.
Growth in exports.
Profitability.
Overall productivity.
Reduction in quality costs.
Overall financial performance.
Overall operational performance.
Competitiveness.
Sales growth.
Earnings growth.
Market share.

3.2.1 Customer satisfaction (CS). The very definition of quality involves exceeding
customers expectations. According to Deming (1986), a firm should not only focus
on do it right first time, but also please its customers, to improve its business
performance. Customer satisfaction has been used as an indicator of both
organizational performance (Terziosvski and Samson 1999) and operational
performance of an organization. Pun (2001) considered customer satisfaction as
a performance indicator of TQM efforts.
3.2.2 Employee morale (EM). An environment conducive to work is essential for
the effectiveness of employees. The work environment influences the employees
abilities to improve the quality of work (Issac et al. 2004). Employees are one of the
important assets of an organization, and their morale and motivation lead to
improved customer focus, resulting in customer satisfaction. This, in turn, leads to an
increase in market share and competitiveness.
3.2.3 Growth in exports (GE). Increase in growth in exports indicates that demand
for the product has increased, across time. It indicates how well an organization
performs compared with the previous years. Terziosvski and Samson (1999) included

P. Padma et al.

export growth as a measure of organizational performance, particularly in the

context of globalization and international trade.
3.2.4 Profitability (Prf). This indicates the efficiency of a company at generating
earnings. The primary goal of any business firm is to make profit. Hence,
profitability also implies how well a firm performs. Agus et al. (2000) included
profitability as a performance indicator of an organization in their study on TQM.
Pun (2001) also considered profitability as a measure of a firms performance.
3.2.5 Market Share (MS). Market share refers to a firms share of the total sales of
all products within the product category in which the firm competes. It provides
information on whether customers are really satisfied with the products/services of
the firm. Terziovski and Samson (1999) included market share growth to indicate
organizational performance in their study on the relationship between TQM and
organizational performance.
3.2.6 Overall productivity (OP). Productivity indicates if the firm effectively uses
resources to meet its objectives and goals. Terziovski and Samson (1999) included
productivity as an important measure of organizational performance. Pun (2001)
also included overall productivity as a performance indicator of TQM efforts in
his study on TQM in manufacturing and service industries.
3.2.7 Reduction in quality costs (RQC). Cost of quality, as addressed by Taguchi
(1986), is an important measure of organizational performance. It is necessary to
execute cost-effective ways to improve the quality of products/services/processes.
Even though the implementation of TQM programs may increase the cost initially,
the cost of quality is expected to decline due to less defects and rework, in the long
term. Terziovski and Samson (1999) included cost of quality as a measure to
indicate organizational performance.
3.2.8 Overall financial performance (OFP). It gives an indication of a firms
business performance. It provides information about how well an organization meets
its goals, and how effectively it uses resources to achieve an efficient process that
results in good products/services. Agus et al. (2000) considered overall financial
performance as an indicator of organizational performance.
3.2.9 Overall operational performance (OOP). Operational performance is related
to the understanding, optimizing and aligning the operational business activities and
processes to a common set of goals and objectives to improve effectiveness. Overall
operational performance is an indicator of a firms capability to utilize its resources
effectively in order to meet its objectives (both financially and operationally).
Terziovski and Samson (1999) considered operational performance as an essential
measure of organizational performance.

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

3.2.10 Competitiveness (Cmp). Competitiveness indicates the performance of

firms in external trade markets. The knowledge about competitiveness is used to
benchmark a firms performance against its competitors performance, and
hence, could be used to gauge customer satisfaction. Pun (2001) included
competitiveness as an important measure of organizational performance in the
broader context of TQM.
3.2.11 Sales growth (SG). Sales growth is the average growth rate of sales per
share. While sales figures do not necessarily indicate the performance of a firm, sales
growth indicates to a firm about how well it is doing financially, in spite of changes
in market size or economic conditions. Pun (2001), in a study on TQM adoption in
manufacturing and service industries, considered sales turnover as an indicator of
firm performance. Terziosvski and Samson (1999) also considered sales growth as
an indicator of organizational performance.
3.2.12 Earnings growth (EG). Earnings are total income less total expenses. They
have a very vital role to play in a firms efforts towards development of markets and
only positive earnings growth can stimulate this development. Earnings growth is
an important financial factor that provides perspective on a firms profitability and
shareholder value.

4. The sample and the instrument for ISO 9001:2000

For the sample survey, only those firms that meet the following criteria have been
included in the study: the firm should belong to the manufacturing sector, and the
firm should be certified ISO 9001:2000. As there appears to be no prior instrument
for measuring the CFs for ISO 9001:2000 in the manufacturing sector, an instrument
has been developed in the current study (see the Appendix), with a note on the
critical factors (CFs) and the corresponding items. We wish to mention here that this
note was not included in the questionnaire sent to the organizations. The units of
analysis in this study are ISO 9001:2000 certified firms. From the Indian Product
Promotion Centres Directory (IPPC 2002), 120 ISO 9001:2000 certified manufacturing firms were randomly chosen and included in the sample. Questionnaires were
mailed to personnel who were responsible for the implementation of QMS in their
respective organizations. After persistent attempts spanning many months, 37 ISO
9001:2000 certified firms responded. The questionnaire consisted of a General
section to obtain general information about the respondents organizations, and two
sections, section A and section B. The General section contained the queries related
to organization such as number of employees, annual turnover, export orientation,
scope of the firm (e.g. national and international), time taken to install the quality
system, etc. The questions in section A pertained to the respective CFs for fulfilling
ISO 9001:2000 standards. The items belonging to different CFs were jumbled in
order to minimize respondent biases. This section included 75 items indicating the
operating elements. The operating elements were identified from a review of
literature on quality processes and ISO 9001:2000 standards, discussion with experts
and professionals in the industry. In effect, each CF is a construct with various

P. Padma et al.

operating elements being the constituents. Section B lists out various indicators of
organizational performance, on the corresponding level and change scales, as
perceived by the management.
In this study, two seven-point scales have been used in the questionnaire against
every item in sections A and B. The choice of the seven-point scale is consistent with
the literature on TQM and ISO systems (e.g. Huarng 1998, Sureshchandar et al.
2001). The first one, ranging from 0 to 6, has been used to indicate the perceived
level of presence of various operating elements of ISO 9001:2000/indicators of
organizational performance. The scale is given below:
0
Nil

1
Marginal
presence

2
Moderate
presence

3
Significant
presence

4
High
presence

5
Very high
presence

6
Complete
presence

As this scale includes the entire range for the level of current presence of an
operating element/an indicator of organizational performance, it is called the
level scale.
The second scale, ranging from 3 to 3 through 0, is used to indicate the extent of
change in an operating element/indicator of organizational performance over a period
of time, due to the implementation of ISO 9001:2000. This scale is given below:

3
Complete
negative
change

2
Significant
negative
change

1
Marginal
negative
change

0
No change

1
Marginal
positive
change

2
Significant
positive
change

3
Complete
positive
change

As this scale indicates the extent of change in the operating elements of

ISO 9001:2000/indicators of organizational performance, it is called the change scale.
It is found that all six CFs are necessary for effective implementation of
ISO 9001:2000 standards. However, in some organizations, some CFs were present
even before implementing ISO 9001:2000. Hence, a study of these CFs (through their
constituent operating elements) on the change scale becomes relevant.

5. Categorization of sample attributes

This section deals with the attributes of the sample firms and their categorization.
The attributes are: number of employees or size of the firms, turnover of the firms,
geographic scope of the firms (in terms of location in more than one country), and
export orientation of the firms (in terms of export and non-export of products).
Sample information is given in tables 1 and 2.
Several works (e.g. Ghobadian and Gallear 1997, Ahire and Golhar 1996) on
quality initiatives and quality practices have researched the effect of firm attributes.
As the ISO 9001:2000 registration process proves to be costly, and financial measures
such as profitability, sales growth, and earnings growth have been included in the
study, it is appropriate to determine if firms in different turnover categories exhibit

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

Table 1.

Categorization of ISO 9001:2000 certified firms with respect

to number of employees (size of the firms).

Category

Criterion of
categorization

No. of firms
in the sample

Small
Medium
Large

Number of employees  400

401  number of employees  800
Number of employees4800

12
14
11

Table 2.

Categorization of ISO 9001:2000 certified firms with respect to

turnover of the firms.

Category

Criterion of categorization
(rupees in millions)

Low
Medium
High

Turnover5100
101  Turnover  200
Turnover4200

No. of firms
in the sample
10
9
18

significant differences. According to Wilson and Chua (1988), the external efficiency
of a firm can be measured by the net total turnover. International firms, because
of their exposure to international markets, might have more mature quality
methods and systems in place when compared to national firms. Further, it is a
common notion that export-oriented firms perform better when compared to nonexport-oriented firms, as they cater to foreign markets. Hence, it is worthwhile to
investigate the differences between international and national firms and also those
between export oriented and non-export oriented firms in terms of QMS
certification. These aspects do not seem to have been addressed in the literature,
and hence this analysis is quite relevant and appropriate.

6. Methodology
After the data have been collected, the instrument is tested for validity,
unidimensionality and reliability, and then subjected to various hypothesis tests
to draw interpretations about the population. For establishing face validity, the
questionnaires have been given to three categories of experts, namely academics,
executives and consultants, and they have been requested to scrutinize the
questionnaires and indicate the relevance of each item. The present instrument has
been developed based on a thorough review of conceptual and empirical literature
to ensure content validity.
Measurement theory requires that a set of items that are developed and used for
representing one factor should be statistically uni-dimensional. This refers to the
existence of a single trait/construct underlying a set of measures (Hair et al. 1998).
Keeping in mind the available sample, analysis of variance (ANOVA) has been
performed on each set of items to identify the possible significant differences among

10

P. Padma et al.

their values. Items exhibiting significant differences from the rest in the sets have
been identified by using post-hoc tests and removed from further analyses. An item
exhibiting a significant difference in either the level scale or the change scale is
removed from both scales to maintain uniformity throughout the instrument. It is
found that only the p-value of TMC is less than 0.05, implying a significant
difference among the items representing it. Hence, a post-hoc test (Bonferroni
method) has been done to identify items having significant differences in both scales,
and they have not been considered for further analyses. Item 8 of TMC and item
11 of MMC (which are underlined in the Appendix) are found to have a significant
difference, and hence removed from further analyses.
The reliability of an instrument is commonly measured by Cronbachs coefficient
alpha. It was found that after performing unidimensionality test, all the CFs are
found to equal or exceed the desirable value of 0.6. Hence, the scale is reliable.
All the six CFs are found to exhibit validity, unidimensionality and reliability.
Hence, ISO 9001:2000 can be conceptualized using a six dimensional framework with
each CF being a dimension. The standardized instrument can therefore be used to
measure the levels of the CFs for ISO 9001:2000 practices in an organization.

7. Descriptive statistics of the CFs

The descriptive statistics of the CFs for ISO 9001:2000, namely, minimum (Min),
maximum (Max), mean and standard deviation (SD) of the CF scores are presented
on both level (table 3 and figure 1) and change (table 4 and figure 2) scales. Box and
whisker plots are used to indicate the inter-quartile range (IQR), outliers (shown
by ) and extreme values (shown by ) for each CF.

7.1 Descriptive statistics of the CFslevel scale

. TMCs mean is relatively higher (4.76), whereas its range value is the lowest,
and its SD is also low. The single outlier does not affect the responses for
TMC. Respondents unanimously agree that TMC is vital for ISO 9001:2000
fulfilment.
. CuF has the highest mean value (4.82), which implies that CuF is prominent
when compared to other CFs. There were more international firms in the
Table 3.
CFs
Mean
SD
IQR
Min
Max
Range

Descriptive statistics of the CFslevel scale.

TMC

CuF

QPM

CI

MMC

HRM

4.76
0.36
0.44
3.67
5.34
1.67

4.82
0.48
0.58
3.83
5.83
2.00

4.51
0.34
0.40
3.53
5.26
1.73

4.41
0.49
0.75
3.33
5.33
2.00

4.49
0.42
0.43
3.10
5.00
1.90

4.55
0.42
0.29
3.00
5.06
2.06

CFs, critical factors.

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

11

6.5
6.0

17

5.5
5.0
4.5
4.0
9

7
1

1
2
24

37
MMC

37
HRM

7
9

3.5
3.0
2.5
N=

37
TMC

37
CuF

Figure 1.

37
QPM

37
CI

Box and whisker plots for the CFslevel scale.

3.5
2

3.0
2.5

2
4

2
1
4
3

22
2
3

2.0
1.5
1

1.0

1
24

.5

24

0.0
N=

37
TMC

Figure 2.

Table 4.
CFs
Mean
SD
IQR
Min
Max
Range

37
CuF

37
QPM

37
CI

37
MMC

37
HRM

Box and whisker plots for the CFschange scale.

Descriptive statistics of the CFschange scale.

TMC

CuF

QPM

CI

MMC

HRM

1.78
0.40
0.56
1.11
3.00
1.89

1.77
0.51
0.66
0.50
3.00
2.50

1.63
0.41
0.40
0.93
2.93
2.00

1.77
0.48
0.58
0.33
3.00
2.67

1.68
0.33
0.28
0.86
3.00
2.14

1.68
0.29
0.29
1.06
2.41
1.35

12

P. Padma et al.

sample, and usually international firms are known to have separate

departments for customer care.
QPM has a relatively low mean value of 4.51. All the surveyed firms have
more or less similar processes to manage and improve quality, and this might
be the reason for this data pattern of low SD and symmetrical IQR.
Though CI does not have any outlier, it has the lowest mean value of 4.41
and the highest IQR and SD values. As firms continuously strive to improve
their quality, CI would not be perceived as having been accomplished totally
at any point of time, leading to the low mean value and relatively higher
data dispersion.
MMC has a relatively low mean (4.49), relatively high SD and range, which
may be attributed to the outliers and the extreme value in the responses. As
measuring quality requires the use of various statistical tools and techniques
that are either expensive or intricate to use and understand, the firms seem
to struggle in opting for a good measurement tool to manage quality and
monitor their quality processes.
HRM has a relatively high mean value (4.55). Although the IQR of HRM is
the least, it has the highest range value. This is due to the presence of outliers
and extreme values. Hence, we can conclude that firms consider HRM as
relatively important and that a majority of the respondents have similar
perceptions of HRM.
It is interesting and important to note that firms consider soft or people
related issues (CuF, TMC, and HRM) and effective leadership as relatively
more important than the methods and procedures (QPM, MMC, and CI)
they follow.

7.2 Descriptive statistics of the CFschange scale

. TMC has the highest mean, a relatively low SD, relatively high IQR, and an
outlier. Hence, we can infer that in spite of variations in the perceptions of
respondents, TMC has undergone maximum change due to the implementation of ISO 9001:2000.
. CuF has the second highest mean value of 1.77, the largest SD and the largest
IQR. It has also obtained the second highest mean value. This indicates that
due to the implementation of QMS, organizations have learned that retaining
customers is most essential, and this in turn becomes a motive for them to
provide more customer focus.
. Besides the presence of outliers and extreme values on the upper side, QPM
has the lowest IQR and the lowest mean value of 1.63. All the firms
experience more or less similar problems to change their processes, despite
the implementation of QMS.
. CIs relatively high mean value of 1.77 indicates that firms have begun to
consider continuous improvement as vital to their presence in the market.
It has a relatively high IQR and SD, which indicates that the perception of
respondents is dispersed widely.
. MMC has a relatively low mean value of 1.68 and the lowest IQR value.
Its relatively high range value may be due to the presence of a pair of outliers,

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

13

and an extreme value. Firms find it hard to change their methods and
procedures of measuring quality processes.
. HRM has a relatively low mean value of 1.68, besides the lowest SD, IQR,
and range values. Hence, we can infer that most firms have not significantly
changed their way of managing people following ISO 9001:2000 certification.

8. Descriptive statistics of the IOPs

The descriptive statistics of the IOP on both level (table 5 and figure 3) and change
(table 6 and figure 4) scales are presented in this section.

8.1 Descriptive statistics of the IOPslevel scale

. CS has the highest mean value of 5.00 and the lowest range. It has the
minimum IQR value along with OP, despite the presence of extreme values.
With ISO 9001:2000 certification, firms give greater importance to customers
and this has led to a higher level of presence of CS.
. A relatively high level of presence of EM might be attributed to the relatively
high level of presence of HRM.
Table 5.

Descriptive statistics of the IOPslevel scale.

IOPs

CS

EM

GE

Cmp

SG

EG

Prf

MS

OP

RQC

OFP

OOP

Mean
SD
IQR
Min
Max
Range

5.00
0.75
0.00
3.00
6.00
3.00

4.46
1.22
1.00
0.00
6.00
6.00

3.70
1.35
0.50
0.00
5.00
5.00

4.43
0.69
1.00
3.00
6.00
3.00

4.16
0.99
1.00
0.00
6.00
6.00

3.73
1.50
2.00
0.00
6.00
6.00

3.65
1.64
2.00
0.00
6.00
6.00

4.32
0.97
1.00
0.00
6.00
6.00

4.86
0.98
0.00
0.00
6.00
6.00

4.81
0.91
2.00
3.00
6.00
3.00

4.14
1.03
1.00
0.00
6.00
6.00

4.81
1.00
1.00
1.00
6.00
5.00

IOP, indicators of organizational performance.

7
6

2
4
20
25

25
6
4
20
13
28
26
29

86
3
2
16
10
37
35
18
1

24
7
34
10

15
2

8
32
21
3
24

7
4

1
24

0
-1
N=

24

37
CS

37
EM

17
28

32
28

37
GE

Figure 3.

37
Cmp

37
SG

28
27
29
24

37
EG

33
24
35
27
28

37
Prf

28

37
MS

27

37
OP

24

37
RQC

37
OFP

Box and whisker plots for the IOPslevel scale.

37
OOP

14

P. Padma et al.
Table 6.

Descriptive statistics of the IOPschange scale.

IOPs

CS

EM

GE

Cmp

SG

EG

Prf

MS

OP

RQC

OFP

OOP

Mean
SD
IQR
Min
Max
Range

1.97
0.64
0.00
1.00
3.00
2.00

1.95
0.78
1.50
0.00
3.00
3.00

0.95
0.78
1.00
0.00
3.00
3.00

1.32
0.85
1.00
0.00
3.00
3.00

1.54
0.99
1.00
0.00
3.00
3.00

1.27
0.87
1.00
0.00
3.00
3.00

0.92
0.92
2.00
0.00
3.00
3.00

1.43
0.73
1.00
0.00
3.00
3.00

1.89
0.88
2.00
3.00
0.00
3.00

2.00
0.88
2.00
0.00
3.00
3.00

1.35
0.75
1.00
0.00
3.00
3.00

1.84
0.69
1.00
1.00
3.00
2.00

37
CmP

37
SG

3.5
3.0

39
2
4
13
0
6

2.5
2.0
1.5
1.0

10
31
28
17
34
35
15
18

.5
0.0
-.5
N=

37
CS

37
EM

Figure 4.

37
GE

37
EG

37
Prf

37
MS

37
OP

37
RQC

37
OFP

37
OOP

Box and whisker plots for the IOPschange scale.

. GE has a relatively very low mean value of 3.70 because most of the surveyed
firms are already export-oriented.
. Cmp has a relatively high mean value of 4.43 due to the high levels of
presence of CS and EM. The lowest SD value of Cmp may be attributed to
medium-sized firms, which are the largest in number in their category, giving
rise to the lowest overall SD value for Cmp.
. The relatively higher mean value of 4.16 of SG is so because of higher focus
on customers. SG has the highest range value, which might be due to the
presence of an extreme value.
. EG has high mean value of 3.73. It has the maximum IQR, along with Prf
and RQC. From this, it is evident that the perceptions of respondents about
EG differ widely. Its maximum range value may be attributed to the presence
of an outlier.
. Prf has the lowest mean value among the IOPs. Further, it has the highest
SD, range and IQR. This is so because in the short run the firms take quality
initiatives to improve quality and not to increase their profitability.
. MS has a relatively moderate mean value of 4.32 and the maximum range
value. This is so because firms may realize the fruits of their quality initiatives
after a much longer duration.
. OP has a relatively high mean value of 4.86 and the lowest IQR. As the firms
begin to use their human resources (indicated by a high EM value), it is quite
natural that they become highly productive.
. RQC has a relatively high mean value of 4.81 and a low range value.
Since firms experience more productivity, they simultaneously learn to utilize

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

15

and manage their resources effectively and efficiently resulting in cost

reduction.
. OFP has a relatively lower mean value of 4.14 and the highest range as firms
experience less financial gains due to quality initiatives in the short run.
. OOP has a relatively high mean and range. Once firms become productive
and learn to utilize their resources efficiently, they display better operational
performance.

8.2 Descriptive statistics of the IOPschange scale

. CS has a relatively high mean value of 1.97, the minimum SD, IQR
and range values, despite the presence of extreme values. As the purpose of
QMS is to enhance customer satisfaction by meeting customer requirements,
it is natural for the firms to experience an increase in CS due to the
certification.
. EM has a relatively high mean value of 1.95 and a very high IQR. This is so
because organizations become more and more focused towards both internal
and external customers, resulting in larger changes in CS and EM after the
certification.
. GE has the lowest mean value of 0.95 and a high IQR. The respondents have
widely differing perceptions about GE. Further, not all the firms are export
oriented, which could be the reason for the smaller changes observed in GE.
. Cmps mean value of 1.32 indicates that firms do not experience a significant
change in competitiveness because CP depends not only on the positions of
the firms but also on those of their competitors.
. SG and EG have relatively low mean values and high SD values. From this, it
appears that due to ISO 9001:2000 certification, the financial indicators of
firms do not undergo rapid changes.
. Prf has a relatively low mean value of 0.92 and the maximum IQR value,
along with OP and RQC. Though the perceptions of respondents are
dispersed, they opine that like other financial measures, profitability too does
not change significantly due to the certification process.
. The low mean value, 1.43 of MS, indicates that firms need a longer time
period to experience a greater change.
. OP has a higher mean value of 1.89 and high IQR, which imply that there is
an increase in overall productivity due to the ISO 9001:2000 certification,
though the perceptions of respondents vary widely. This increase can be
attributed to the increase in CS and EM.
. RQC has the highest mean value of 2.00, which indicates that firms enjoy
greater reduction in costs due to the certification process. This reduction in
costs is due to the effective utilization of resources as indicated by higher
mean value of OP.
. OFPs mean value is understandably low because of the longer time needed
for firms to experience financial gains.
. OOP has a relatively high mean value (of 1.84) that can be attributed to the
larger change in RQC and OP.

16

P. Padma et al.

9. Effect of implementation of ISO 9001:2000 on the CFs and IOPs

This analysis is done to determine if the implementation of ISO 9001:2000 has
desirable effects on the CFs and IOPs of ISO 9001:2000 certified firms, i.e. to find
out if ISO 9001:2000 implementation has a significant positive influence on the
respective CFs and IOPs. The following hypotheses have been framed and tested,
with reference to each CF and IOPs.
H0.1: There is no significant change in the CFs due to the implementation
of ISO 9001:2000.
H0.2: There is no significant change in the IOPs due to the implementation
of ISO 9001:2000.
For testing these hypotheses, the t-test is used. The mean value of extent of
change in each CF and IOP, measured on the change scale, is compared with the test
value of 0, which indicates that there is no significant difference due to
implementation of ISO 9001:2000. From tables 7 and 8, it is seen that there is a
significant change (indicated by **) in each CF and IOP. Further, the mean values
are all positive, implying an improvement in all the CFs and IOPs after implementing

Table 7.
CFs
TMC
CuF
QPM
CI
MMC
HRM

Results of one sample t-test for H0.1.

Mean

Standard
deviation

t value

p value

1.78
1.63
1.67
1.77
1.65
1.67

0.40
0.51
0.41
0.48
0.33
0.29

26.54
23.82
34.89
20.87
20.68
30.26

0.00
0.00
0.00
0.00
0.00
0.00

Table 8.

Results of one sample t-test for H0.2.

IOPs

Mean

Standard
deviation

t value

p value

CS
EM
GE
Cmp
SG
EG
Prf
MS
OP
RQC
OFP
OOP

1.97
1.94
0.94
1.32
1.54
1.27
0.91
1.43
1.89
2.00
1.35
1.83

0.64
0.78
0.78
0.85
0.99
0.87
0.92
0.73
0.88
0.88
0.75
0.69

18.61
15.17
7.37
9.45
9.47
8.87
6.04
11.96
13.15
13.79
10.91
16.25

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

17

ISO 9001:2000. Therefore, manufacturing firms can justify going in for the ISO
9001:2000 certification.

10. Levels of and changes in CFs (in relation to firm attributes)

10.1 Levels of and changes in CFs (in relation to size of the firms)
From table 9a, it is observed that small size firms do not have the highest mean and
the lowest SD values for any CF. Medium-sized firms have the highest mean and the
lowest SD values for all the CFs, except TMC, for which the second highest mean
value and the lowest SD are observed. Large firms have the highest mean value for
TMC. Small firms, though certified, might not have the necessary systems in place
due to lack of human resources. Further, medium-sized firms cater to large firms and
are under greater pressure to strictly comply with the ISO 9001:2000 requirements.
Meanwhile, large firms already have a huge and diverse market, and the certification
serves only to sustain their current market position. So, it is evident that large firms
do not always perform better (see Ahire and Golhar 1996 for similar results). From
table 9b, it is seen that small firms have the highest mean for QPM. Medium firms
have the highest mean values for CuF and CI. Large firms experience the maximum
Table 9a. Levels of CFs (in relation to size of the firms).
Size of the firms
Small
CFs
TMC
CuF
QPM
CI
MMC
HRM

Medium

Large

Mean

SD

Mean

SD

Mean

SD

4.77
4.74
4.45
4.39
4.44
4.50

0.38
0.50
0.34
0.54
0.46
0.46

4.78
5.00
4.53
4.58
4.61
4.65

0.46
0.52
0.43
0.54
0.57
0.65

4.79
4.83
4.52
4.57
4.54
4.52

0.46
0.52
0.43
0.54
0.57
0.65

Table 9b.

Changes in CFs (in relation to size of the firms).

Size of the firms
Small

CFs
TMC
CuF
QPM
CI
MMC
HRM

Medium

Large

Mean

SD

Mean

SD

Mean

SD

1.79
1.72
1.71
1.58
1.65
1.65

0.47
0.51
0.56
0.58
0.48
0.34

1.65
1.85
1.56
1.69
1.66
1.68

0.33
0.38
0.34
0.30
0.24
0.25

1.91
1.72
1.64
1.69
1.72
1.71

0.40
0.67
0.32
0.60
0.27
0.31

18

P. Padma et al.

change in TMC, MMC and HRM. Due to certification, large firms assign greater
importance to committed leadership, measurement of current processes, and
managing human resources for creating a quality conscious environment. Medium
firms have realized the importance of customer focus and continuous improvement
after certification, and small firms, due to the lack of adequate human resources,
focus more on methods and procedures.

10.2 Levels of and changes in CFs (in relation to turnover of the firms)
From table 10a, it is seen that firms with low turnover have the highest mean and the
lowest SD for QPM. Firms with medium turnover have the greatest mean and
the lowest SD values for all the other CFs. Firms with high turnover do not have the
highest mean and the lowest SD for any CF. Firms with low turnover follow set
standards and procedures to improve quality, but unlike medium and high turnover
firms, they do not have lavish resources for making improvements and innovations.
Hence, they have a low mean value for CI. Meanwhile, medium firms, despite their
turnover not being very high, plan and allocate their resources in order to have
efficient processes and continuously engage themselves in researching for improving
their processes. As firms with high turnover go in for certification to sustain their
Table 10a.

Levels of CFs (in relation to turnover of the firms).

Turnover of the firms
Low

CFs
TMC
CuF
QPM
CI
MMC
HRM

Medium

High

Mean

SD

Mean

SD

Mean

SD

4.67
4.83
4.57
4.25
4.52
4.59

0.35
0.42
0.21
0.49
0.36
0.28

4.86
4.94
4.56
4.59
4.65
4.72

0.29
0.39
0.24
0.23
0.21
0.16

4.75
4.76
4.45
4.42
4.45
4.44

0.40
0.56
0.44
0.58
0.52
0.44

Table 10b.

Changes in CFs (in relation to turnover of the firms).

Turnover of the firms
Low

CFs
TMC
CuF
QPM
CI
MMC
HRM

Medium

High

Mean

SD

Mean

SD

Mean

SD

1.72
1.70
1.65
1.53
1.55
1.60

0.26
0.32
0.46
0.34
0.28
0.27

1.60
1.72
1.52
1.53
1.65
1.66

0.30
0.35
0.38
0.28
0.19
0.19

1.89
1.83
1.68
1.78
1.76
1.72

0.49
0.66
0.42
0.60
0.40
0.34

19

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

market, it is not imperative for these firms to improve their actual systems and
processes. From table 10b, it is observed that firms with low and medium turnovers
do not have the highest mean values for any CF. Firms with high turnover have
experienced the highest changes for all the CFs. This is so because as the firms go in
for certification, they allocate more funds in order to realize the fruits of their efforts
to improve quality.
10.3 Levels of and changes in CFs (in relation to export orientation of the firms)
Table 11 shows that, for the level scale, non-export-oriented firms have higher mean
values for all the CFs, except for TMC for which export oriented firms have higher
mean value. This is so because for non-export-oriented firms the pressure comes
directly from the local market, which makes it imperative for the firms to establish a
good QMS. Further, non-export-oriented firms have lower SD for all the CFs, which
show that respondents have similar perceptions about the levels of presence of CFs
in these firms. These observations are in conflict with those made by Taylor (1996).
It is observed from the change scale that non-export-oriented firms have experienced
higher changes for MMC and HRM, and export-oriented firms have higher changes
for all the other CFs.
10.4 Levels of and changes in CFs (in relation to number of years with
QMS certification)
From table 12, for level scale, it is seen that less experienced firms have higher mean
and lower SD values with respect to TMC, QPM, CI and MMC, whereas more
experienced firms have higher mean and lower SD values for CuF and HRM. This
is due to the fact that while more experienced firms continue to give importance to
people-related (soft) issues, they gradually lose their drive to improve quality (see
Agus and Abdullah 2000 for contradictory results). On the contrary, less experienced
firms commit themselves to continuously improve quality for better organizational
performance. This is further reinforced by higher changes for all their CFs. Hence,
we can conclude that these firms which sustain their initial drive and enthusiasm
become more and more focused towards establishing a QMS in place. Meanwhile,
for more experienced firms which standardize their processes in the course of time,
Table 11. Levels of and changes in CFs (in relation to export orientation of the firms).
Level scale
Non-export oriented
CFs
TMC
CuF
QPM
CI
MMC
HRM

Change scale

Export oriented

Non-export oriented

Export oriented

Mean

SD

Mean

SD

Mean

SD

Mean

SD

4.72
5.07
4.71
4.55
4.64
4.69

0.28
0.34
0.27
0.33
0.17
0.21

4.77
4.74
4.45
4.39
4.44
4.50

0.38
0.50
0.34
0.54
0.46
0.46

1.65
1.67
1.61
1.53
1.69
1.71

0.29
0.32
0.37
0.38
0.28
0.26

1.82
1.80
1.64
1.69
1.67
1.67

0.43
0.56
0.44
0.51
0.36
0.30

20

P. Padma et al.
Table 12. Levels of and changes in CFs (in relation to number of
years with certification).
Level scale
52 years
CFs
TMC
CuF
QPM
CI
MMC
HRM

Change scale

2 years

52 years

2 years

Mean

SD

Mean

SD

Mean

SD

Mean

SD

4.90
4.82
4.57
4.50
4.59
4.50

0.32
0.55
0.22
0.60
0.40
0.46

4.73
4.82
4.50
4.40
4.47
4.56

0.36
0.48
0.36
0.48
0.42
0.42

1.92
1.94
1.82
1.86
1.94
1.69

0.60
0.58
0.55
0.64
0.53
0.37

1.74
1.73
1.60
1.61
1.62
1.67

0.36
0.50
0.38
0.45
0.27
0.28

Table 13. Levels of and changes in CFs (in relation to geographic

scope of the firms).
Level scale
National
CFs
TMC
CuF
QPM
CI
MMC
HRM

Change scale

International

National

International

Mean

SD

Mean

SD

Mean

SD

Mean

SD

4.71
4.52
4.58
4.19
4.54
4.50

0.33
0.56
0.19
0.57
0.41
0.43

4.77
4.89
4.49
4.47
4.48
4.56

0.37
0.45
0.37
0.47
0.43
0.43

1.92
1.85
1.78
1.71
1.93
1.77

0.52
0.56
0.57
0.66
0.48
0.37

1.74
1.75
1.60
1.64
1.62
1.65

0.38
0.51
0.37
0.45
0.27
0.27

there is less chance for variation in the perception of respondents about the change in
CFs.

10.5 Levels of and changes in CFs (in relation to geographic scope of the firms)
It is evident from table 13 that national firms have higher mean values for QPM and
MMC, whereas international companies have higher mean values for TMC, CuF,
CI and HRM. National firms have stringent quality processes in place that are
measured and monitored regularly in order to improve their quality and hence catch
up with the international firms. Being exposed to international markets, it is
common for international firms to have a separate department to manage human
resources. The lower SD values exhibited by national firms for TMC, QPM and
MMC and international firms for CuF, CI and HRM show the similar perceptions of
respondents. It is also observed that national firms are found to have higher changes
for all the CFs. This is so because they experience a greater market pressure and
hence they attempt to catch up with their international counterparts.

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

21

11. Levels of and changes in IOPs (in relation to firm attributes)

11.1 Levels of and changes in IOPs (in relation to size of the firms)
It is observed from table 14a that small size firms have the highest mean values for
Cmp, SG, EG, Prf, MS and OP. Medium-sized firms have the highest mean and the
lowest SD values for CS, EM, OFP and OOP. They also have the highest mean value
for RQC. As these firms have the highest level of presence of CuF and HRM (see
table 9a), they can be expected to exhibit the highest level of presence of CS and EM
respectively. They also have the highest mean values for QPM, CI and MMC, which
could have led to highest reduction in quality costs, and therefore the highest OOP,
which in turn leads to better financial performance. Large size firms have the highest
mean value of GE as the QMS certification of these firms improves their
international market image leading to improved export performance. Table 14b
shows that small size firms have the highest change values for Cmp, EG, Prf, MS,
OFP and OOP. Most of these firms, in spite of the availability of limited human
resources, are more experienced. Further, they have the highest change for QPM (see
table 9b). All these explain their improved market and internal performance.
Medium-sized firms have experienced the maximum change in CS, EM, and OP.
This is due to the higher change in CuF and CI. Large size firms have the highest
mean values for GE, SG, and RQC. These firms already have a huge and varied
market, and experience an increase in their exports and sales due to their greater
focus towards TMC, MMC, and HRM. This also has led to a decrease in their
quality costs.

11.2 Levels of and changes in IOPs (in relation to turnover of the firms)
From table 15a, it is seen that firms with low turnover have the highest mean and the
lowest SD values for GE, SG and EG. This is because these firms manage their
Table 14a. Levels of IOPs (in relation to size of the firms).
Size of the firms
Small

Medium

Large

IOPs

Mean

SD

Mean

SD

Mean

SD

CS
EM
GE
Cmp
SG
EG
Prf
MS
OP
RQC
OFP
OOP

4.58
4.00
3.83
4.58
4.42
4.08
4.25
4.75
5.08
4.50
4.25
4.83

0.90
1.48
1.19
0.67
0.79
1.00
1.06
0.62
0.51
1.09
0.97
0.94

5.36
5.00
3.43
4.50
3.86
3.57
3.29
3.86
4.64
5.21
4.36
5.00

0.50
0.78
1.55
0.52
1.29
1.60
1.86
1.29
1.39
0.80
0.63
0.55

5.00
4.27
3.91
4.18
4.27
3.55
3.45
4.45
4.91
4.64
3.73
4.55

0.63
1.19
1.30
0.87
0.65
1.86
1.81
0.52
0.70
0.67
1.42
1.44

22

P. Padma et al.
Table 14b. Changes in IOPs (in relation to size of the firms).
Size of the firms
Small

Medium

Large

IOPs

Mean

SD

Mean

SD

Mean

SD

CS
EM
GE
Cmp
SG
EG
Prf
MS
OP
RQC
OFP
OOP

1.97
2.00
1.08
1.42
1.42
1.50
1.08
1.67
1.92
2.08
1.50
1.92

0.92
0.74
0.90
1.00
0.90
0.80
0.90
0.78
0.79
0.90
0.80
0.67

2.07
2.14
0.57
1.21
1.43
1.14
0.93
1.36
2.00
1.71
1.43
1.71

0.62
0.66
0.65
0.80
0.94
0.86
1.07
0.84
0.96
0.83
0.76
0.73

1.91
1.64
1.27
1.36
1.82
1.18
0.73
1.27
1.73
2.27
1.09
1.91

0.70
0.92
0.65
0.81
1.17
0.98
0.79
0.47
0.90
0.90
0.70
0.70

Table 15a. Levels of IOPs (in relation to turnover of the firms).

Turnover of the firms
Low

Medium

High

IOPs

Mean

SD

Mean

SD

Mean

SD

CS
EM
GE
Cmp
SG
EG
Prf
MS
OP
RQC
OFP
OOP

4.80
4.20
4.00
4.40
4.30
4.10
3.90
4.40
5.00
4.70
4.20
4.80

0.79
1.69
1.15
0.70
0.67
0.74
1.52
0.70
0.47
1.06
0.79
0.79

5.44
5.00
3.67
4.56
4.11
3.44
2.67
3.89
4.56
5.11
4.33
5.00

0.53
0.71
1.50
0.53
1.62
2.07
2.06
1.54
1.74
0.78
0.50
0.50

4.89
4.33
3.56
4.39
4.11
3.67
4.00
4.50
4.94
4.72
4.00
4.72

0.76
1.08
1.42
0.78
0.76
1.53
1.33
0.71
0.64
0.89
1.33
1.27

quality processes in the best possible way (see table 10a). Firms with medium
turnover have the highest mean and lowest SD values for CS, EM, Cmp, RQC, OFP,
OOP. As the firms with medium turnover have better resources available and
continuously strive to improve their existing processes, it is apparent that they
display the best internal performance (indicated by higher means of RQC, OFP and
OOP). They also have the highest level of presence of CuF and HRM, which provide
reasons for the presence of the highest level of CS and EM. Firms with high turnover
have the highest mean and lowest SD values for Prf and MS. It is possible that these

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

23

Table 15b. Changes in IOPs (in relation to turnover of the firms).

Turnover of the firms
Low

Medium

High

IOPs

Mean

SD

Mean

SD

Mean

SD

CS
EM
GE
Cmp
SG
EG
Prf
MS
OP
RQC
OFP
OOP

1.80
1.90
1.00
1.30
1.50
1.30
1.00
1.40
1.70
1.70
1.40
1.60

0.63
0.74
0.67
0.82
0.71
0.67
0.82
0.84
0.48
0.67
0.70
0.70

2.00
2.00
0.78
1.00
1.56
1.00
0.44
1.33
2.22
2.11
1.00
1.78

0.71
0.71
0.83
0.71
1.13
0.71
0.73
0.71
1.09
0.60
0.00
0.67

2.06
1.94
1.00
1.50
1.56
1.39
1.11
1.50
1.83
2.11
1.50
2.00

0.61
0.87
0.84
0.92
1.10
1.04
1.02
0.71
0.92
1.08
0.92
0.69

firms utilize their certification only to consolidate their market, as they already might
have a large and varied market. From table 15b, for change scale, it is seen that firms
with low turnover have the highest mean and lowest SD values for GE. This shows
that though these firms have relatively less financial resources, they experience the
greatest increase in exports due to certification. Firms with medium turnover have
the highest mean and lowest SD values for EM and RQC. Respondents unanimously
feel that these firms, which did not have proper focus on soft issues prior to
certification, understand their importance and start managing people in much more
effective ways (indicated by better EM value). Firms with high turnover show the
highest mean values for CS, Cmp, SG, EG, Prf, MS, OP, OFP, and OOP. These
firms experience an increase in all the CFs (see table 10b) due to which they undergo
higher changes in market performance and internal performance.

11.3 Levels of and changes in IOPs (in relation to export orientation of the firms)
From table 16, it is seen that non-export oriented firms have a higher mean value for
EM, Cmp, SG, MS, OFP and OOP. They have lower SD values for all these IOPs
except SG. This indicates that non-export oriented firms are directly under the
pressure of local market demands. These results are in agreement with those
obtained for the CFs (see table 11). Export oriented firms have higher mean values
for CS, Prf, OP, and RQC, because they have a highly committed top management
and more efficient leadership to guide them through their quality journey. It is also
seen that in the change scale, non-export oriented firms have higher mean values
for SG, EG, Prf, MS, OP, OFP, and OOP. It can be attributed to higher changes
they have undergone in MMC and HRM (see table 11). Export oriented firms have
higher mean values for CS, EM, Cmp, and RQC. This is due to the increase in all
the CFs except MMC and HRM.

24

P. Padma et al.

Table 16. Levels of and changes in IOPs (in relation to export orientation of the firms).
Level scale
Non-export oriented

Change scale

Export oriented

Non-export oriented

Export oriented

IOPs

Mean

SD

Mean

SD

Mean

SD

Mean

SD

CS
EM
Cmp
SG
EG
Prf
MS
OP
RQC
OFP
OOP

4.67
4.67
4.67
4.00
3.11
4.56
4.44
4.56
4.33
5.00
4.67

0.71
1.00
0.50
1.66
1.83
0.53
1.67
0.53
0.50
0.71
0.71

5.11
4.39
4.00
3.64
3.82
4.25
5.00
4.89
4.07
4.75
5.11

0.74
1.29
1.05
1.47
1.56
1.08
0.61
0.99
1.15
1.08
0.74

1.67
1.67
1.22
1.89
1.56
1.22
1.78
1.89
1.89
1.56
2.11

0.71
0.71
0.97
1.05
0.88
0.97
0.67
1.05
0.60
0.88
0.78

2.07
2.04
1.36
1.43
1.18
0.82
1.32
1.89
2.04
1.29
1.75

0.60
0.79
0.83
0.96
0.86
0.90
0.72
0.83
0.96
0.71
0.65

Table 17. Levels of and changes in IOPs (in relation to number of years with certification).
Level scale
52 years

Change scale
2 years

52 years

2 years

IOPs

Mean

SD

Mean

SD

Mean

SD

Mean

SD

CS
EM
GE
Cmp
SG
EG
Prf
MS
OP
RQC
OFP
OOP

5.03
4.35
3.68
4.42
4.23
3.71
3.61
4.39
4.81
4.94
4.06
5.00

0.66
1.25
1.25
0.72
0.67
1.42
1.58
0.62
1.05
0.93
1.06
0.89

4.83
5.00
3.83
4.50
3.83
3.83
3.83
4.00
5.17
4.17
4.50
5.00

1.17
0.89
1.94
0.55
2.04
2.04
2.04
2.10
0.41
0.41
0.84
0.85

1.67
2.17
1.00
1.50
1.83
1.50
1.50
1.67
2.00
1.67
1.33
1.83

0.82
0.75
1.10
1.05
0.98
1.05
1.05
1.21
0.63
1.03
1.03
0.75

2.03
1.90
0.94
1.29
1.48
1.23
0.81
1.39
1.87
2.06
1.35
1.84

0.60
0.79
0.73
0.82
1.00
0.84
0.87
0.62
0.92
0.85
0.71
0.69

11.4 Levels of and changes in IOPs (in relation to number of years with
QMS certification)
It is observed from table 17 that less experienced firms have higher mean and lower
SD values for CS, SG, MS, and RQC. This may be attributed to the higher mean
values of TMC, QPM, CI and MMC they exhibit (see table 12). More experienced
firms have higher mean values for EM, Cmp, OP, and OFP. In the course of time,
these firms learn to cater to varied markets and hence, they have higher levels of
presence of these IOPs. Further, they have higher mean values for CuF and HRM,
which lead to higher mean value of EM. Both the type of firms have the same mean

25

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

value for OOP, which indicates that both less experienced and more experienced
firms perform well operationally. It is also seen that less experienced firms experience
higher changes in EM, GE, SG, Prf, MS, and OP. This is so because these firms have
experienced a higher change in all the CFs (see table 12). Further, they are more
enthusiastic in improving their quality processes and procedures, due to which they
exhibit higher changes in market performance. Higher change in EM may be
attributed to the greater change these firms experienced in HRM. It is evident that
more experienced firms have undergone higher changes in CS, Cmp, EG, RQC, OFP,
and OOP. Due to their more mature processes, these firms have achieved improved
internal performance, and hence, a greater reduction in quality costs, an increase in
the satisfaction of customers, thereby resulting in higher competitive advantage.

11.5 Levels of and changes in IOPs (in relation to geographic scope of the firms)
From table 18, it is evident that national firms have higher mean values for GE, Cmp,
EG, SG, Prf, MS, OP, OFP and OOP. This shows that these firms have better
market performance and internal performance than the international firms. Since
these firms need to concentrate on relatively smaller markets, they can better manage
market performance. They also have higher mean values for QPM and MMC (see
table 13), which might have led to their better internal performance. These firms also
have lower SD values for these IOPs, which indicates the similarity in the responses
obtained. International firms have higher mean and lower SD values for CS and
RQC. They also possess a higher mean value for EM. This is so because these firms,
due to their exposure to international markets, have a higher level of presence of
TMC, CuF, and HRM. Further, they have a higher mean value for CI, which
indicates that they continuously engage themselves in improving their quality
processes. This is the reason for their experiencing higher reduction in quality costs.
Further, it is shown from the table that national firms have undergone greater
Table 18. Levels of and changes in IOPs (in relation to geographic scope of the firms).
Level scale
Change scale National

Change scale
International

National

International

IOPs

Mean

SD

Mean

SD

Mean

SD

Mean

SD

CS
EM
GE
Cmp
SG
EG
Prf
MS
OP
RQC
OFP
OOP

4.57
4.29
4.57
4.43
4.43
4.57
4.43
4.71
5.00
4.14
4.43
5.00

0.79
0.95
0.79
0.53
0.98
0.98
0.98
0.76
0.58
0.90
0.98
1.00

5.10
4.50
3.50
4.43
4.10
3.53
3.47
4.23
4.83
4.97
4.07
4.77

0.71
1.28
1.38
0.73
0.99
1.55
1.72
1.01
1.05
0.85
1.05
1.01

1.86
1.71
0.95
1.32
1.54
1.27
1.29
2.00
2.00
1.86
1.29
2.00

0.69
0.95
0.78
0.85
0.99
0.87
0.95
0.82
0.82
0.90
0.95
0.58

2.00
2.00
0.80
1.23
1.47
1.17
0.83
1.30
1.87
2.03
1.37
1.80

0.64
0.74
0.71
0.77
1.01
0.87
0.91
0.65
0.90
0.89
0.72
0.71

26

P. Padma et al.

changes in GE, Cmp, SG, EG, Prf, MS, OP, and OOP. This is due to the increase
in all the CFs that these firms experienced during the certification process.

12. Summary and conclusions

The worldwide quality revolution has spurred a lot of research in quality
management. This study has dealt with some aspects of the implementation of
ISO 9001:2000 in Indian manufacturing firms. A questionnaire has been developed
to analyse ISO 9000 implementation and validated. Some of the major findings
of the study are summarized as follows.
. Indian manufacturing firms consider soft issues (such as TMC, CuF, and
HRM) and effective leadership as relatively more important than the
methods and procedures they follow.
. Firms find it hard to change their methods and processes to improve quality,
but have begun to realize the importance of CI.
. Firms experience higher reduction in quality related costs, which might be
due to the effective utilization of resources, as indicated by improved
operational performance.
. It is evident that there is a significant change in all CFs and IOPs, which
shows that manufacturing firms are justified in going in for ISO 9001:2000
certification.
. On the contrary to normal expectations, non-export oriented firms exhibited
higher levels of all the CFs (except TMC) due to the pressure they face in the
local market.
. Medium-sized firms, as they cater to large firms, are under pressure to strictly
comply with the ISO 9001:2000 requirements.
. High turnover firms experienced the highest changes in all the CFs as they
realize the importance of allocating more funds for their quality improvement efforts to be fruitful.
. Less experienced firms sustain their enthusiasm and drive to improve their
quality processes, and hence exhibit higher changes in market performance.
. National firms show better market performance and internal performance
than the international firms. Since these firms need to concentrate on
relatively smaller markets they can better manage market performance.
Despite these findings, the study has some limitations. The sample size was
restricted to 37 due to operational constraints and instead of confirmatory factor
analysis, analysis of variance was done to establish unidimensionality. Further, the
data was not collected from non-certified firms. Hence, future research may attempt
to replicate the current one with much larger sample, including non-certified firms,
and employing confirmatory factor analysis for ensuring unidimensionality.

Acknowledgement
The authors are thankful to the referee for the suggestions and comments to improve
the earlier version of the paper.

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

27

Appendix
Section A: critical factors of ISO 9001:2000
Note: in the actual questionnaire, the items were jumbled and the respondents were
requested to respond on both the level scale (0 to 6) and change scale (
3 to 3).
Top management commitment (TMC)
. Top management emphasis on quality policy and quality objectives.
. Customer focus nurtured by the top management.
. Extent to which necessary resources are allocated and made available by top
management for the implementation of quality policy.
. Top management emphasis on continuous review and improvement in
quality management system.
. Top management emphasis on education, training and development of
human resource in the organization for an effective quality management
system.
. Assumption of responsibility for quality by top management.
. Top management emphasis on quality rather than cost.
. Review of quality objectives and targets with respect to intensity of review.
. Review of quality objectives and targets with respect to frequency of review.
Customer focus (CuF)
. Extent to which the needs and expectations of customers are assessed
periodically for an effective QMS.
. Presence of documentation in conformity to customers requirements.
. Extent to which the concept of internal customer is understood in the
organisation.
. Understanding and dissemination of customers requirements throughout the
organisation.
. Extent to which external customers complaints are effectively resolved.
. Extent to which the quality management personnel are made aware of the
need for customer focus.
. Degree to which effective ways of communicating with customers are
determined and practised.
Quality process management (QPM)
. Continuous assessment of processes necessary to attain the quality objectives.
. Development of methods and measurements to determine the effectiveness of
various processes in the organisation.
. Appropriate definition of processes necessary for product realisation.
. Extent to which internal quality audits are made use of for better process
management.

28

P. Padma et al.

. Effective use of quality manuals.

. Presence of records that provide objective evidence of organizational
activities and their results.
. Implementation and maintenance of procedures to be followed in various
processes.
. Dependability and reliability of processes.
. Emphasis given to the elimination of defects and reworks.
. Integration of suppliers and vendors into the operations in the organization.
. Practice of preventive/predictive maintenance in the organisation.
. Involvement of supplier in the product development process.
. Practice of total productive maintenance in the organization.
. Process automation in the organization.
. Extent to which quality is built in right at the design stage of new products.
Continuous improvement (CI)
Effectiveness of continuous improvement processes.
Use of methods and measurements for continuous improvement of processes.
Level of continuous assessment of the QMS.
Extent to which organization feels that continuous improvement results in
competitive advantage.
. Emphasis of continuous improvement in all operations and at all levels.
. Extent to which corrective actions with respect to non-conformity are taken
immediately and effectively.
. Degree to which processes and procedures are foolproof.
.
.
.
.

Measurement, monitoring and control (MMC)

. Maintenance of documentation for repeatability and traceability.
. Extent to which internal audits are conducted at planned intervals.
. Extent to which data and statistical techniques are used for promoting
continuous improvement.
. Monitoring and control of quality processes by the top management.
. Identification and control of non-conforming products from their unintended use or delivery.
. Actions appropriate to non-conformity taken when the non-conforming
product is identified after delivery or use.
. Collection of data with respect to the cause of variation between the desired
and actual out comes in various processes.
. Prevention of non-conformities.
. Extent to which corrective actions with respect to non-conformity are taken
immediately and effectively.
. Prevalence of bench marking in the organisation.
. Assessment and use of penalty costs of non-conformance for an effective
quality management system.
. Use of statistical and quality control techniques for evaluating production/
service processes.

Critical factors of ISO 9001:2000 and performance of Indian manufacturers

29

. Extent to which data and statistical techniques are collected and used for
assessing the strengths and weaknesses of quality management system.
. Extent to which the purchased product conforms to specified purchase
requirements.
. Use of data and statistical techniques for analysis of defects and reworks.
. Use of data and statistical techniques for analysing the non-conformity to
product specifications and quality procedures.
. Extent to which quality data and control charts are used at the workplace.
. Use of various methodologies to improve the formulation of quality
strategy.
. Extent to which design, development, verification and validation of quality
processes (and products) are carried out.

Human resources management (HRM)

. Determination of work requirements for implementing QMS effectively.
. Assignment of responsibility to the quality management personnel in the
organization.
. Extent to which physical and ergonomic factors are given consideration to
provide congenial atmosphere to the QMS personnel.
. Extent to which the personnel are periodically trained in the implementation
of QMS.
. Extent to which the skills and expertise of employees are enhanced.
. Extent to which the drive for quality processes and improvement overrides
(or dominates) the need for obtaining immediate results.
. Extent to which the quality management personnel are provided with
facilities and supervisory support.
. Extent to which supervisory behaviour influences the productivity of the
organisation.
. Positive attitude of work force towards QMS.
. Motivation of employee for the implementation of QMS.
. Extent to which job enrichment of quality management personnel is
prevalent in the organisation.
. Prevalence of top-down and bottom-up communication processes among
quality management personnel.
. Clarity of work or process instruction given to employees.
. Degree to which quality management personnel are trained to be conscious
of human relations.
. Support and encouragement provided to quality management personnel to
solve problems.
. Extent to which quality management personnel are protected and advised in
the event of their inadvertent and unforeseen failures while pursuing ISO
standards.
. Extent to which data related to quality are available to employees.
. Training provided to supervisors and managers in statistical techniques.
. Extent to which team spirit dominates individual preferences and
projections.

30

P. Padma et al.

Section B: indicators of organizational performance

.
.
.
.
.
.
.
.
.
.
.
.

Customer satisfaction
Growth in exports
Sales growth
Profitability
Overall productivity
Overall financial performance
Employee morale
Competitiveness
Earnings growth
Market share
Reduction in quality costs
Overall operational performance

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