Research " Motivating Factors and Perceived Benefit Successes in Implementing the ISO 9002 Registration Process " docx

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Motivating Factors and Perceived Benefit Successes in Implementing the ISO 9002 Registration Process

by

Joseph A Williams

MBA, University of Missouri, 1980

B.S., Huston-Tillotson College, Austin, Texas 1960

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Copyright 2003 by Williams, Joseph A All rights reserved ® UMI UMI Microform 3097945 Copyright 2003 by ProQuest Information and Learning Company

All rights reserved This microform edition is protected against

unauthorized copying under Title 17, United States Code ProQuest Information and Learning Company

300 North Zeeb Road

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APPLIED MANAGEMENT AND DECISION SCIENCES

This is to certify that I have examined the doctoral dissertation by Joseph A Williams

and have found that it is complete and satisfactory in all respects, and that any and all revisions required by

the review committee have been made

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APPLIED MANAGEMENT AND DECISION SCIENCES

This is to certify that | have examined the doctoral dissertation by Joseph A Williams

and have found that 1t is complete and satisfactory in all respects

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APPLIED MANAGEMENT AND DECISION SCIENCES

This is to certify that I have examined the doctoral dissertation by Joseph A Williams

and have found that it is complete and satisfactory in all respects

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APPLIED MANAGEMENT AND DECISION SCIENCES

This is to certify that I have examined the doctoral dissertation by Joseph A Williams

and have found that it is complete and satisfactery in all respects

Dr Robert Hoye, Faculty Representative - Health and Human Services Faculty

4 Signature

te ay A003

(Date

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Motivating Factors and Perceived Benefit Successes in Implementing the ISO 9002 Registration Process

by

Joseph A Williams

MBA, University of Missouri, 1980

B.S., Huston-Tillotson College, Austin, Texas 1960

Proposal Submitted in Partial Fulfillment of the Requirements for the Degree of

Doctor of Philosophy

Applied Management and Decision Sciences

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The study was designed to provide information that may help companies recoup their initial and ongoing costs of ISO 9002 registration Five companies representing different industrial sectors were studied Employees’ perceptions of the reasons their organization decided to implement ISO 9002 and the resulting benefits achieved since executing the decision were examined

Employees selected to participate represented a cross-section of personnel at varying job levels in each organization These employees were asked to complete a 2- part, 27-item validated questionnaire Each was asked to rank the order of importance of 7 motivating factors Gndependent variables) that describe the reason his or her company was motivated to implement ISO 9002 registration The second part of the questionnaire asked the employees to use a 6-point Likert type scale to rate the level of success of 20 benefit achievement statements (observed variables treated as dependent variables) since implementing ISO 9002 registration

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Several individuals provided support for this dissertation Without their help, completing this project would have been next to impossible First, I would like to recognize the help of my wife Janett Rice for her many hours of editimg and patience that went into this

project I would like to thank my dissertation advisor Dr L Hoehn, who kept me on track and inspired me to pursue this research topic My gratitude also goes out to the five

companies that agreed to participate in the comparison study; Dr Lisa Bendixen, who advised me regarding questionnaire validation; and the review panel composed of Dr J Lanese, Dr K Kyllo, Mr Guillotte, Mr Gaddy, Mr Peveler, and Ms Hut Dr R

Brickman, my statistician, provided valuable statistical advice Lastly, but not least, I thank Ms Marcia Estrella and Ms Meredith McGhan for their editorial support

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Scope, Delimitation, and LIMHALO' on HH HH ni ni nen 14 U00 7:: na a 14

Sipmificance ofthe SIUỦY - HH HH HH Han re 15 C)UITHTATY on "¬ 16

CHAPTER 2 REVIEW OF THE LITERATURE Q2 1n ng ve 18 Ho An e 18

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Discussion of Data CoÏl©eCEION co nh ng ung 69

Motivating FaclOrs AnaÏYSIS co ch TH 72

2 v0:89)) 3:09: n6 72

Group Đ€SDOIHSC LH HT TH gi 72 Individual Ranking Đ€SDOIS€ ĐH HH me 73 Group vs Individual Ranking Đ€spDO'S€ con nen ng 74 Benefits Realized AnaÌyS1S - LH HH ng re 76 080: đà in 76

Group Benefits Realiz€d cọ HH HH HH He nh 77 Individual Benefits Realized — 79

Group vs Individual Benefits Realized - - ng re 80 Motivating Factors and Beneffts COIIDATISOTH - con ng 8Í Motivating Factors and Benefits Correlation cv ng ng re 82 [CĨ 2/089) 90 0809 0n 82

Subresearch QUestiOT co ng re 86 1SƠ Implemenfation QualtativC An ÏVSIS ng ng re 88 On-Site Interview Response ee HH ngư 88 On-Site Document Review FImI8S - HH ng ng ng ng ng 92 Ma PT GA 94 CHAPTER 5 SUMMARY, CƠNCLUSIONS, AND RECOMMENDATIONS 98 ha: ca PA 98 Ê®U:v0 0 nh 100 CC a86).ivi090, nh 100 Research Question ÍWO HH ng nh cư 102 ` 080) i0 103 RĐccomme€ndfIOINS «co cv HT HH cọ HH HH ng 104 Business Seeking ISO 9002 Reg1SÍTAEIOT co ng ng ng ng 104 Improvement for Current ŠUỞY HH TH ng HH 1n re 106 Areas for Further ŠEUỦY - nh ng TH Hang re 107 hào 80 vn 108

|›42051.451)i01 55a 109

APPENDIXES TT 114 Appendix A: Research Request and Consent FOTINS co eeceeeree 115

Appendix B: Questionnarre Clartficatton EXD€TĂ cuc ng re, 123

Appendix C: Questionnaire Validation ÏDafA - HH HH HH1 ray 133

Appendix D: Questionnaire Response D4f4 cv ng cư 138

Appendix E: On-Site Interviews and Response DafA -.c eesxeeseesex 142 Appendix F: On-Sfe Document Review FIndĐS - cover 151

Appendix G: Motivating Factors Response Data eeeeeecesseceeoeenereaees 155

Appendix H: Benefits Realizcd Response 4ÍA HH ng seo 170

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` Page

1 Industrles SariDÌ€Ở - cọ nọ họ TT g gưg 54

2 Source Of Data 70

3 Group Ranking Frequency DistrIDUtlOTi - ng TH ng ng ng ngà 72

4 Group vs Individual Company Ranking - «cọc HH ng p re 74

h Cu co nh 76

6 Top Ten Benefits nh 78

7 Benefits ReaHlizecd: Individual Company vs GroUp ŠCOTCS co co sec 79

8 Benefits Realized vs Motivating Fac{OrS An ÌYVSIS cuc HH ng ngư $1

9a Suưmmary of ME vs Benefits Coefficient of Ranking Correlation - 83 9b Summary of ME vs Benefiis Coefficient of Rankimg Correlatton 84

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1 Customer Demand Group RankKinE, - cu ng 163

2 Qualtty Improvemeni Benefits Group RankIng ch kem 164

3 Part Of A Large Strategy Group Ranking - - - cm ng ng ng 165

4 Pressure From Competfor Group Ranking - HH ng ng 166

5 Market Strategy Group Ranking eee eeecosecccscsenssenscccsscceseceseeeecntesseccstsseeeeseoe 167 6 NonEuropean Umon Government Requrement Group Rankimg - + 168

7 Required Of EU Regulations Group Ranking ch HH ng re 169

bRz 290600 6n NA" 178

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Introduction

In American business, it is common in both the public and private sectors to innovate without determining how and why the innovation might help the organization

Making wise decisions is necessary to the success of a business, but no decision is better

than the motivation to carry it out (Likert, 1961) While reasons for adopting innovations vary, it is possible that the success of an innovation is related to the motivation for adopting it

Some innovations require total commitment from managerial as well as

nonmanagerial employees Others require extensive training before the innovation can be

successfully installed Often, when training is needed, an organization will emphasize the

technical aspects of the innovation without considering the nontechnical aspects, such as managers’ and other employees’ motivational skills Thus, the effectiveness of training should be measurable so that personnel can learn which training strategies and techniques are most effective

Firms often fail to determine an evaluation plan to monitor an innovation’s

successes and failures Some gains should accrue when an innovation is fully

incorporated, as well as others accruing along the way Organization leaders need to

determine evaluation points throughout the implementation of an mnovation so that they

can make decisions relative to proper adjustments for variances and achieve the goals

they have set Although it is important to research processes related to innovation

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educate themselves on the most effective ways to install quality assurance policies This study focused on a crucial innovation in quality assurance, the ISO 9002- registration process These standards govern systems, not products As such, products do not meet ISO 9002 standards; organizations do This author approached ISO 9002 implementation from a behavioral science perspective The human factor in question for

this study was motivation This author dxamjibd whether the benefits that followed ISO

9002 certification were higher for firms motivated by a desire for quality rather than any kind of perceived coercion Although the main focus of the study examines the

implementation of the specific ISO 9002 model for quality assurance in production,

installation, and servicing, the reader needs to be aware that the term ISO 9000 is used in a generic sense in referring to ISO 9002 The ISO 9000 quality assurance process is a

guide for selecting performance standards encompassing not only 9002 but also 9001 and 9003

More than 100 countries, including the United States, have adopted these

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become registered to one of three ISO 9000 Standard Series (See Definition of Terms)

Seeking ISO 9002 registration requires the organization’s management to involve all employees’ efforts and accepting ownership of the implementation process for the organization to gain the full expected benefits after executing this decision Some of these expected benefits, supported by survey studies, are increased quality awareness, reduced customer audits, increased market share, improved documentation, and increased annual

sales Thus, motivating the entire company’s workforce is an important factor in

achieving the maximum benefits from the implementation process

Related literature supported the importance of this study According to Stevenson and Barnes (2001), misunderstandings surround the certification process Some believe it is merely a fad Others think that no real benefits are attained and the process generates excessive costs and paperwork According to some critics, companies are pursuing certificates rather than quality

However, numerous studies have reported substantial benefits Yet, despite these benefit successes, some organizations have not achieved the same level of success as others These studies include, but are not limited to, the JSO 9000 Survey’ 99 (1999);

Lloyd’s Register Quality Assurance (as cited in Stevenson& Barnes, 2001); and Dun and Bradstreet (1996) This disparity in the way ISO 9000 certification benefits are perceived has prompted this inquiry

The core issue of the study was what role motivational factors play in employees’

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fact that [ISO 9000 fits its overall quality improvement strategy This research explored whether two firms whose staffs are motivated by different reasons can achieve similar benefits This research is useful because a behavioral perspective regarding the ISO 9000 certification issue is necessary due to a substantial literature void Definition of Terms 1 ANSI: Anacronym for American National Standard Institute (CANSUASOC Q9000-1; 1994) ASQ: An acronym for American Society for Quality (ANSI/ASQC Q9000-1; 1994) ASQC: An acronym for American Society for Quality Control (ANSI/ASQC Q9000-1; 1994)

Audit: A systematic examination of a single activity, element, department, or total quality system (ANSI/ISO ASQ Q9000; 2000)

External Audit: An audit performed by the company on its own suppliers

or subcontractors

Factor: An event that could influence outcome of a variable

internal Audit: An audit performed by company personnel on a company’s

own initiative (ANSI/ASQ Q9002-1994; 1994)

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10 11 12 13 14 15 16 17 (ANSI/ASQC Q9000-1-1994; 1994)

ISO 9001 (1994): A model for quality assurance in design/development, production, installation and servicing (ANSI/ASQ Q9001-1994; 1994) ISO 9002 (1994): A model for quality assurance in production, installation

and servicing (ANSI/ASQ Q9002-1994; 1994)

TSO 9003 (1994): A model for quality assurance in final inspection and testing (ANSI/ASQ Q9003-1994; 1994)

ISO 9001: (2000): Quality management systems requirements

(ANSIASO/ASQ Q9001-2000; 2000)

Management Representative (MR): An employee appointed by the employer who has the authority and responsibility for ensuring that the requirements of the quality standard are implemented and maintained

(ANSI/ASQ Q9002-1994; 1994)

Motivational Factor: An employee’s state of mind prior to implementing

the ISO 9000 certification process (Huarng, Horng, & Chen, 1999)

Process: A set of interrelated or interacting activities that transforms inputs into outputs (ANSI/AISO/ASQ Q9004-2000; 2000)

Process Approach: Managing activities and related resources (i.e input and output) as a more efficient process to achieve the desired results

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19

20

21

requirements from a customer viewpoint (ANSI/ISO ASQ Q9000; 2000; Crosby, 1992; Deming, 1990; Juran, 1974)

Quality Assurance: Part of quality management focused on product or service and providing confidence that quality requirement will be fulfilled (ANSIASO ASQ Q9000; 2000)

Quality Management: An aspect of overall management function for determining and implementing quality policy, settmg objectives, planning to meet objectives, organizing to execute the plan (ANSIASO ASQ

Q9000; 2000; Juran, 1964)

Quality System: The organizational structure, procedures, processes, and resources needed to implement quality management (ANSI/ISO/ASQ

Q9004-2000, 2000)

System Approach: A thought process used to improve fitness of use by restudying the entire progression rather than by accepting the present progression and refining the elements within it (ANSI/ISO/ASQ 09004- 2000, 2000; Juran, 1974)

Statement of the Problem

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with increased positive attitudes, use of computerized information systems, and

involvement of all employees, implementing ISO 9000 could enhance a firm’s product quality

This study did not attempt to determine a cause-and-effect relationship between the two variables as Huarng et al (1999) did in their research Instead, this author attempted to discover the degree of the relationship between the variables

There is a need to know how much of the reason for differences in the degree of

perceived benefits is influenced by the different motivating factors driving ISO 9000 implementation After all, employees (i.c., the human factor) implement ISO 9000 because it cannot implement itself Having this element as a factor involves attitudes which drive motivation (Upmeyer, 1989) Thus, the current completed study was designed to bring a behavioral science perspective into the research arena

Preview of the Research Method

Research methodology imto the behavior of employees included an on-site visit to observe the operating settings of the participants during data collection via an on-site

written questionnaire This visit included observation of the nonmanipulated variable

(motivation) and a survey The model tested in the present study was based on a modified version of a model by Huarng et al in which process and motivation determine

performance If motivation is for x reason, then certain conditions follow If it is for y reason, different conditions follow Likert (1961) offered a formula to describe the

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of the equation is low, the action performed could be unsatisfactory” (p 212)

The written questionnaire (i.e the instrument) consisted of 27 items There were 7 items to rank motivational factors (independent variables) and 20 items to rate the degree of success in benefits realized (observed variables)

A guided face-to-face interview covered 20 questions with information on education and training, costs, savings, size, employees’ involvement, and the implementation process

The author used 10 guided questions to structure an on-site tour consisting of observing and reviewing evidence (i.c., documents) of the firm’s application of ISO 9002 registration

Background of the Problem

Conforming to ISO 9000 standards is becoming critical ISO 9000 registration is becoming a requirement for doing business with the EU In the United States, the Food and Drug Administration, the Department of Defense, NASA, and the Big Three automobile manufacturers now require their suppliers to be registered to QS 9000 in

addition to ISO 9000 In 1999, there were 343,643 ISO 9000 certifications in 150

countries, which represented a 26.4% increase over the previous year (Stevenson & Barnes, 2001)

In 1992, only 300 U.S firms had registered with ISO 9000 (Rabbitt & Bergh,

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still growing in the United States, the U.S is trailing the rest of the world

Some writers have suggested reasons for U.S companies’ apprehension about

catching up Two ongoing criticisms have been identified The first is that firms pursue

certification rather than quality The second is that certification is too costly to implement and maintain This second concern has caused some firms to use a self-certification

process (Stevenson & Barnes, 2001) The four major factors generating cost, according to Stevenson and Barnes, are (a) time, (b) training, (c) consulting, and (d) the registration itself These four factors result in an average cost for large corporations costing more than $1 million for ISO 9000 registration, and smaller companies (annual sales of 25

million) costing $250,000, plus an annual maintenance cost of $70,000 The average total

cost in 1993 (not adjusted for size) was $222,900 In 1996, the average cost began to

decline to $187,000, and in 1999 it was $155,900 according to ISO 9000 Survey 99 (1999)

Although total costs dropped significantly between 1993 and 1999, the high cost of obtaining ISO 9000 certification is still a major concern for some small and medium- sized firms This study supports the concept that employee motivation based on quality

improvement results in increased benefits of ISO 9000 implementation Increased

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been casually mentioned in numerous studies, and only addressed as criticisms of the registration process This study, unlike the others, directly addressed the issue of behavior Its results will provide information that could help concerned companies keep

down ISO 9000 implementation costs in terms of the human motivational factor

influencing the expected benefits

The results of the present study bring a new perspective to the ISO 9000 certification process arena by examining the behaviorally oriented constructs of

motivation factors that Huarng et al introduced in 1999 The author tested the theory that

processes and motivations relate to performance (Huarng, et al., 1999) However, the current study did not use the same research methodology, data collection, and sampling procedure as Huarng et al They chose a survey research design, while this author chose a correlation research design Huarng et al attempted to determine a cause-and-effect relationship between the independent and dependent variables This author attempted to determine the strength of that relationship by comparing five different companies

certified to the same ISO 9000 standard, but with different motivational goals for seeking certification According to Stevenson and Barnes (2001) studies show that U.S

companies making the financial investment to seek certification in the past 14 years have achieved significant economic and quality systems benefits Stevenson and Barnes cited studies by Lloyd’s Register Quality Assurance, which found that ISO 9000 registration imcreased net profits; Simmons and White’s (1999) study found that, after adjusting for

size, ISO 900 registered companies were more profitable than nonregistered companies;

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registered companies The key question that keeps coming up is what the motivating factors were the certificate or the ISO 9000 process itself?

The outcome of the study adds a new approach to perceiving factors that

influence the benefits expected when companies seek certification It helps explain the

behavior of firms pursuing certificates rather than quality benefits The study can increase cost savings by creating awareness of motivational factors influencing benefit successes that are intrinsic to the design of the process

Theoretical Support for the Study

The primary research question of the current study was derived from an existing

concept (Huarng et al., 1999) suggesting that the ISO 9000 process and motivation are

related to performance (i.c., benefits) The survey method that Huarng et al and related studies have used is an effective research approach, but in some cases, authors did not get a chance to observe the operating settings of survey participants

In 1999, Huarng et al conducted the only survey of its’ kind, a study suggesting that the ISO 9000 process and motivation relate to performance The focus was on the impact of motivation and the implementation process on the benefits of ISO 9000 firms in Taiwan Motivation served as the authors’ nonmanipulated variable This was drawn from the field of organizational behavior (OB), citing the views of Sitkin et al that a “significant portion of organizational outcomes could be predicted by participants’

disposition” (p 2) |

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process and motivation relate to performance (i.e., benefits realized) However, based on

‘their literature and theory development, the correlation between independent and

dependent variables could not prove a cause-and-effect relationship Huarng et al offered no explanation for the lack of a cause-and-effect outcome

The concept underlying [SO 9000 certification is that the development of

products and services is the result of a standard system In this system, inputs and outputs can be measured in terms of benefits at intervals during the process ISO 9000

certification documents the procedures and measures how well they conform to the documentation (Stevenson & Barnes, 2001) The [SO 9000 quality standard describes the

use of ISO 9000 quality systems in customer and company benefits It states

(Section 0.4.4) consideration of the following: increased profitability, increased market share, reduced cost, improved fitness for use, increased customer satisfaction, and increased customer confidence (ANSI/ISO/ASQC-Q9004-1-1994, p 1.) Realizing the outcome of operating a more efficient quality system is dependent on the company's disposition toward adopting the ISO 9000-registration process, as pointed out by Huarng

et al (1999)

The potential benefits for U.S companies being certified by ISO 9001, 9002, and 9003 had been expected to be enormous Four benefits of ISO 9000 registration are (a) undergoing outside objective assessment, (b) access fo markets, (c) competitive issues, and (d) reduced audits The most critical of these is access to markets, because it enables facilities to maintain or create customer relationships in situations where ISO 9000

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Rabbitt and Bergh (1993) agree with Johnson (1997) about the importance of access to markets According to Rabbitt and Bergh, what initially caused so many

American companies to obtain ISO 9000 certification beginning in 1993 was the prospect of access to the European Union (EU) market and its 380-plus million customers Other potential benefits included maintaining or increasing a customer base (i.e.,

competitiveness); reductions in audits; reductions of costs; improved productivity; and improved efficiency This raised the question, What happens once one gains access to the market? Is the motivation for continuing the process then gone?

The International Standards in the ISO 9000 family are founded upon the

understanding that a process accomplishes all work Every process has inputs The _ outputs are the results of the process The outputs are products, tangible or intangible

The process itself is (or should be) a transformation that adds value (ANSI/ASQC

Q9000-1 (1994) Section (4.6): p 4)

Assumptions

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Scope, Delimitation, and Limitation

The scope of this study included information from five local ISO 9002 registered companies in different industry sectors There were 78 individual participants

This study was nonlongitudinal Any subsequent investigation of ISO 9002

written questionnaires was excluded from future studies that determine whether ISO 9002 benefits have changed during the course of the present study

Organizational efficiency was not part of the current study, nor was compliance or noncompliance with the 20 elements of the ISO 9002 How participants formulated,

calculated, or developed their responses to the interview questions was not within the

scope of this study, so they were free to use estimates or intuition This study excluded firms registered to ISO 9000 standards ISO 9001, ISO 9003, and ISO: 2006 series

The inability to collect all necessary data to perform the comparison analysis was seen as a potential limiting factor for the statistical calculation A firm’s decision not to participate was seen as another possible limitation Generalizations from the data were limited to the five companies

Research Questions

‘The 7 independent variables were the motivation to seek registration and the 20

observed (treated as dependent for this study) variables were the company’s perception of success realized Three examples of the 7 independent variables are customer demand, marketing strategy, and pressure from competitors Three examples of the 20 observed

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1 What are the reasons that motivated seeking ISO 9002 registration as perceived by personnel from five companies?

2 What are the benefits realized since ISO 9002 registration as perceived by

personnel from five companies?

3 What relationships exist between the perceived benefits realized and

motivation to seck ISO 9002 registration? Significance of the Study

One of the purposes of this study was to contribute four things to the field: (a) a new approach to ISO 9000 research from the behavioral perspective instead of a technical and financial perspective; (b} the extension of an existing survey study (Huarng et al., 1999) to a comparative on-site data collection approach; (c) new information for U.S companies and third party registrars to help them make strategic planning and investment decisions when transitioning to the revised ISO 9001: 2000 certification process; and (d) a hew approach to maximizing benefits of the ISO 9000 registration process The present study was initiated to help redirect attention to seeking ISO 9000 certification for reasons other than the short-term gains of the certificate The study results may benefit firms already certified and those that have not yet decided whether to seek certification The behavioral science approach of the study was a new approach and contributes to

broadening technical research in the ISO 9000 certification process

Thus, this study provides an immediate, direct benefit to certified U.S facilities and accredited registrar organizations looking to realize benefits of achieving

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reassessment and retraining of motivational skills needed to maximize benefits

Companies currently involved in the certification process can use the results of this study to make cost-effective decisions about certification by attending to motivational! factors that could influence the cost outcome

This research may help ISO 9000 businesses focus on psychological factors affecting long-term improvements in costs, savings, and benefits Firms could reexamine the long-term goal of certification in terms of motivational factors of the process In doing so, they could reap maximum benefits instead of the short-term successes of a marketing ploy

Additionally, an immediate change, from a business perspective, may be in the area of strategic decision making Companies that have not yet decided to achieve ISO 9000 certification might seek alternatives with equivalent benefits if the motivation factor is for a reason that does not fit their strategic goals For instance, some companies might

choose not to pay for third-party registrar monitoring Such firms might wish to adopt the concept and apply it to their own quality system documentation and monitoring process (Leland, 2000)

Summary

Chapter | contains an overview of the research problem and synthesizes the literature supporting the research topic It also includes a theoretical framework in which this author tests an existing theory from a behavioral perspective with the motivating

factors driven for the process’s benefit successes instead of solely for certificates It

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as well as various studies supporting the concept that the certification process yields

significant benefits

The assumptions, scope and delimitation, definition of terms, research questions, and significance (importance) of the study have been discussed in order to explain the

parameters that the author began under, and the anticipated outcome of the study For

chapters 2 and 3, the author presents a literature review of related studies, methodology,

and design of the study

Chapter 2, the author focuses on literature providing insight into the research topic In the first part of chapter 2, this author analyzes, from a broader perspective, studies related to ISO 9000 certification issues within the United States In the second

part studies are reviewed closely relating to linking the [SO 9000 certification process

with motivational factors which affect process performance

In chapter 3, this author describes the methodology and design that was used in testing the research questions derived from the concept developed by Huarng et al (1999), who suggested that the [ISO 9000 process and motivation are related to

performance In chapter 4, this author describes the data collection source and analysis

that was used for the study and reports on the results of the findings for the three primary and one secondary research question explored This author summarizes, im chapter 5, the goal for the study and draws conclusions from the analysis and results presented in chapter 4 Also, covered in chapter 5 are recommendations for current and prospective ISO 9000 certified businesses to apply the conclusions drawn from the results along with

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introduction

This chapter begins with a description of research studies on the motivation of

firms that have decided te implement ISO 9000 registration process The researcher

examined the theoretical support, or lack thereof, provided by other authors for 7

independent variables and 20 observed variables (treated as dependent variables for this study), The first section is a review of sources relating to motivation and benefits realized to identify general consensus among the authors The second section contains studies on the link between motivation and benefits successes The third section contains studies

that relate to issues associated with ISO 9000 registration and benefits realized Questions

are raised during and at the end of the study along with an assessment of weaknesses and areas relevant to the present study

Specifically, this author summarizes, analyzes, and synthesizes literature relevant

to the relationship between motivating factors to implement [SO 9000 certification and

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ISO 9000 Motivation and Benefit Variables

The search for relevant literature, concentrated on business management literature and dissertation abstracts, revealed no information on how psychological factors may affect ISO 9000 registration An exhaustive survey of numerous articles utilizing the online databases ABI/Inform Global Edition, PsycINFO, Sociological Abstracts, EBSCOhost, and Digital Dissertations yielded nothing on the influence of motivational variables on benefits variables

Thirty-two dissertations addressed the ISO 9000 process, but none focused directly on relating motivation to degree of success Only one business journal article contained information on the relationship between the ISO 9000 process, motivation, and performance (Huarng et al., 1999) This lack of information is neither referenced nor

explained in the literature, although a number of other research studies addressed other

aspects of ISO 9000 implementation

One of these, Stevenson and Barnes’s study, “Fourteen Years of ISO 9000: Impact, Criticisms, Costs, and Benefits” (2001), painted an optimistic view of ISO 9000 certification despite criticism of the process Over a 14-year period, some companies made significant investments (i.e., costs vs projected benefits) in achieving the standard for quality systems (Stevenson & Barnes, 2001) Stevenson and Barnes identified four primary benefits connected to the registration process: (a) cost savings and/or higher profitability, (b) better communications, (c) improved operations, and (d) market

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increased net profits Other studies cited included Simmons and White (1999), who found that, after adjusting for size, ISO 9000 certified companies had increased profits A joint study in 1994 by Deloitte and Touche and Quality System Update (QSU) reported an average annual savings of $179,000 after ISO 9000 registration The latest (1999) ISO 9000 survey study, conducted by QSU and Plexus Corporation, compares surveys conducted in 1993, 1996, and 1999 and showed that savings for small companies has risen from $51,600 in 1993 to $66,900 in 1996 and to $81,700 in 1999 After reviewing these studies, two common characteristics were noted The survey method was used to

collect the information, and there was no mention of the role that could be contributed to

the motivating factors for reaping the benefits, or conversely, motivating factors that can

lead to a lack of benefits realized

Critics often address the latter by saying that companies are motivated to seek registration for the wrong reasons These critics, whose complaints are ongoing, say that

companies mainly display the certificate as a marketing ploy and place less emphasis on

the process (Yates & Aniftos, 1997) Other authors have identified this criticism (Stevenson & Barnes, 2001), but failed to adequately address the influence motivation could have on the degree of success achieved Several surveys (Dun and Bradstreet, 1996; Lloyd’s Register Quality Assurance, 1994; Quality System Update and Plexus Corporation, 1999) have been conducted and many journal articles written on ISO 9000 process benefits with only a casual mention of the impact of the behavioral aspect

The lack of research addressing the motivational factors for the process affecting

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advertising purposes seems to overshadow the intended purpose, developing a process to

maximize cost savings The outcome of this lack of research has diverted some ISO 9000

businesses that are trying to recoup their registration costs but have superficially

implemented quality system standards This study was driven by the belief that to

maximize process efficiency, a company must do the right things for the right reasons This belief coincides with the long-term objective of implementing ISO 9000 processes to maximize organizational and customer needs and expectations, as cited in ISO 9004 Sections 0.1, 0.2, 0.3, 04, and 0.5 of the quality standard

Since 1992, authors have conducted numerous survey studies (Deloitte and Touche 1993; Dun and Bradstreet, 1996; Plexus Corporation and QSU, 1999) to track the costs, savings, and benefits of the system Numerous sources confirmed distinct ISO

9000 benefit achievements Results of such studies indicate that firms implementing ISO

9000 would most likely realize both internal and external benefits In fact, ISO 9000

(1994), Section 0.4.4 Benefit Considerations, 0.4.4.1 For the Company, states that

“consideration has to be given to increase profitability and market share.” Additionally, Section 0.4.4.1, For the Customer, states that “consideration has to be given to reduced costs [and] improved fitness.”

Johnson (1997) gives the following reasons firms seek ISO 9000 certification:

“Customers require it by contract The firm expects such contractual requirements to be imposed in the future The firm views the registration approach as the most effective way

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customer demands the firm seek ISO 9000 registration and the firm responds positively,

the firm will probably maintain that customer The firm is acting because it has no choice if it wants to keep the customer On the other hand, if the firm feels ISO 9000 is the most effective way to implement a quality system, a different outcome might occur

Skrabec, Ragu-Nathan, Subba Rao, and Bhatt (1997) suggested firms seek registration “[t]o establish a base for quality improvement, to gain customers, to improve efficiency/productivity, [and] to keep current customers” (p 26) Naroola and

MacConnell (1996) gave three key reasons: “Continuous improvement, marketing strategy, [and] customer requirement” (pp 38-39) This author used some of these reasons as the independent variables in the present study

Consensus existed among these three studies that companies seeking registration

are motivated by both economic and quality systems improvement expectations This held true even for those firms whose customers require that their supplier be certified A business gains by maintaining its customer base and reducing competitive threats The three studies also agreed on the importance of expectations of quality systems

improvement Personnel expect results such as continuous quality improvement and awareness of the most effective way to implement and manage the quality system All

firms represented within the three studies expressed, while using different categories and terms, a desire for improvement

Skrabec et al., in 1997, listed the following benefits: “Improvement in

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undergo objective assessment by an outside quality professional, [has] access to markets, [better resolves] competitive issues, [enjoys a] potential reduction in audits” (pp

26-27) Naroola and McConnell (1996) mention these benefits: “Improved system documentation, fewer customer audits, improved customer relationships, [and] improved quality awareness” (pp 38-39) Naroola and McConnell listed disadvantages of

registration, but took the position that there were no meaningful disadvantages to

registering Rabbitt and Bergh (1993) listed “Delivery integrity - 98% on-time delivery,

waste reduction, material cost reduction” (pp 76-78); Smith, Ross, and Omachuno

(1998) name: “Greater customer loyalty, improvement in market share, higher stock prices, reduced service calls, higher prices, greater productivity, and cost reduction” (pp

339-340)

Consensus existed within these studies that desired benefits include cost reductions, market share gains, audit reductions, competitiveness, quality awareness,

improved documentation, and customer satisfaction All authors relied on hands-on

experience, surveys, on-site interviews, and testimonies Results like higher product prices and stock prices were also desirable

All the studies listed the advantages of registration, but only Naroola and

MacConneill (1996) used the word “disadvantages.” According to their study, “there are no meaningful disadvantages of registering the quality system to ISO 9000” (p 39) This contrasts with other authors such as Stevenson and Barnes (2001)

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ISO 9000 registration can be measured In the present study, the author seeks to provide answers to these questions due to the need to maximize benefit successes

There has been some disparity between anticipated benefits and actual payoff

The literature review starts with a study conducted by Skrabec, Ragu-Nathan,

Rao, and Bhatt, (1997) Their research addresses the issue of ISO benefits realized and justifies registration costs These authors used a survey design to analyze benefits, costs,

barriers, and the reasons companies pursued ISO 9000 Their results are consistent with a

Dun and Bradstreet survey The results of a sample of 2,000 ISO 9000 registered

companies randomly picked from Dun and Bradstreet’s 1997 listing matched a sample of nonlSO companies The results of five of the top nine reasons for companies to seek ISO 9000 registration, are listed in order of the highest percentage (77.1) to the lowest

percentage (64.4) The top reason is to establish a base for quality improvement; the second is to gain customers, third is to improve efficiency/productivity, fourth is to keep

current customers, and the fifth is to improve customers’ service

The results of the survey’s top anticipated benefits were compared with the actual benefits achieved after companies completed their ISO 9000 Five of the 10 top

anticipated benefits listed in order of the highest percentage value (73.8) to lowest

percentage value (65.1) for anticipated benefits are listed below The first is improvement in documentation; second is improvement in operating standard, third is improvement in

quality awareness, fourth is the ability to sustain market share, and fifth is improved perception of product quality These same five anticipated benefits were compared with