Empirical assessment of ISO 9000 related management practices and performance relationships

Abstract

Unlike the experience in the broader quality management (QM) area, for ISO 9000, the relationships between management practices associated with the standard and performance is relatively under-researched. This has contributed to a general lack of clarity on how the standard works and how effective it is in generating the espoused benefits. In this paper, an attempt is made to fill this gap. Through a review of the standard and associated literature, a set of six management practice constructs (management policies, plans and actions, focus on customers, capable employees, reliable suppliers, sound communication system and steady processes) were identified. Further, three performance constructs (consistent quality outputs, satisfied customers and business performance) were developed based on the espoused outcomes of the standard. Relationships between these constructs were hypothesized, with the relationship between management policies, plans and actions and steady processes constructs being partially mediated by the other four management practice constructs, and the consistent quality outputs and business performance constructs being fully mediated by satisfied customers construct. These relationships were consolidated into a model and empirically tested with data from 418 Australian ISO 9000 registered manufacturing plants using the structural equation modeling technique. Results showed that only two out of the 12 hypothesized relationships were not supported, with management policies, plans and actions being negatively related to steady processes, and focus on customers and steady processes relationship being statistically insignificant. This result supports the assertion that the top management team plays a ubiquitous role, albeit an indirect one in creating steady processes. Also, strong focus on customers could be of little value in creating steady processes. Overall, this study defines the role of stakeholders and shows how they interact with the salient aspects of the ISO 9000 standard. Through this, insights into how the standard works have been developed. Further, a validated framework for effective implementation of ISO 9000 has been produced.