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Description and diffusion of the ISO 9000 standards
The idea that standards should be used to support both social and economic regulations emerged during the late 19th century and early 20th century. The objective of such standards is to limit the uneconomical diversity of components, parts and supplies in order to favour their inter-changeability (Dale, 2002). Indeed, all economic transactions need to be based on a set of common institutions that will serve as a foundation for economic growth. The official definition of standardisation can be found in the ISO/IEC Guide 2 (ISO/IEC, 1991):
Standardisation is the activity of establishing, with regard to actual or potential problems, provisions for common and repeated use, aimed at the achievement of the optimum degree of order in a given context.
The International Standards Organisation (ISO) was established in Geneva, Switzerland in 1947 and has evolved into a major player in standards development. The ISO is a non-governmental organisation with the mission to facilitate worldwide trade through the development of international standards for products and services. In 1987, Technical Committee (TC 176) of the International Organisation for Standardisation published ISO 9000 Quality Assurance Standards. Its origins, however, rest in earlier American (MIL-Q-9858A and MIL-I 45208A) and British standards (BS 5750).
The ISO 9000 family of standards are generic management system standards that can be applied to any organisation regardless of its size, sector of activity, geographic location, product or service being provided. It is not focused on the product/service quality, but on the related processes, enlarging their reach into the entire network of interactions in which the firm is participating. Companies that adopt the ISO 9000 standard can be assured that their quality programs are built on a firm foundation of state-of-the art quality practices (ISO, 2004). The ISO9000 standard is based on eight principles that address the core values and concepts of Quality Management. The main ISO 9000 principles are presented in Table 1.1.
ISO 9000 is seen as a uniform standard, although it consists of a series of nested standards, which changed over time. Originally, the core members of the family, with which firms could actually be certified, were ISO 9001, ISO 9002 and ISO 9003. They differed in terms of the quality system elements they covered. More precisely, ISO 9003 focuses exclusively on final inspection and test standards. ISO 9002 builds on ISO 9003 and in addition targets installation, production and purchasing capabilities, while ISO 9001 was built on the other two standards, including design and after-sales service standards.
Furthermore, according to the rules of the ISO, the ISO 9000 standard undergoes review and revision every 6-8 years. The ISO 9000 underwent a major revision in 2000. The 2000 edition of the ISO 9000 family replaced these three standards with a single one labelled ISO 9000:2000. ISO 9000:2000 describes fundamentals and specifies vocabulary for a Quality Management system and ISO 9004:2000 provides guidelines for performance improvements. Both of them were developed on the basis of previous standards, which they replaced. The revised standards include many new requirements and changes.3 For instance, some of the requirements have been rewritten to facilitate the integration of other standards such as the ISO 14001 environmental standard.
In November 2008, the ISO published the current revision, which is called ISO 9000:2008.4 The changes in ISO 9000:2008 are relatively minor. ISO 9000:2008 does not contain any new requirements nor does it contain changes to any of the existing requirements in ISO 9000:2000. Neither does it change the intent of ISO 9000:2000. Further, the structure and outline of ISO 9000:2008 is identical to that of ISO 9000:2000. ISO 9000:2008 only introduces clarifications to the existing requirements of ISO 9000:2000 based on eight years of experience and introduces some changes to the wording intended to improve consistency with ISO 14001:2004. According to the ISO, the benefits of the changes to the wording in ISO 9000:2008 are easier to use, clearer language, easier to translate into other languages and better compatibility with the ISO 14001:2004 environmental management standard.
According to its design, the ISO 9000 only provides a framework without demanding complete change in how the organisation operates. So as to “ensure that nothing important is left out and that everyone is clear about who is responsible for doing what, when, how, why and where” (ISO, 1998). By the end of 2007, the num ber of ISO 9000 certificates exceeded 900 000 in 175 countries around the world, contributing to its reputation as an international reference for quality requirements in business-to-business dealings (ISO, 2008).
ISO 9000 adoption is a voluntary decision of each firm. Each country has an authoritative body that is responsible for accrediting the registering bodies for that country. The registering bodies are then responsible for certifying the firm that seeks certification. For instance, registering bodies include government laboratories, private testing organisations, firms that already possess ISO certification and industry trade groups. In the certification process, registrars may have different methods of assessment and certification. Nevertheless, the implementation process usually contains 14 steps that are: evaluate the organisations objectives and targets for implementing a QMS; obtain knowledge about the ISO 9000 family and appoint a management representative; organise resources; raise awareness and provide training; initial review/gap analysis; product realisation processes; planning and time frame; draft a quality manual; develop the policy; design the QMS and implement it; draft the documentation; carry out internal audits; conduct a management review; pre-assessment-apply for certification; conduct periodic evaluations and initiate corrective and preventive actions; and evaluation.
The certification process is daunting and lengthy. As a result, the process itself is the main source of criticism of ISO 9000. The time to achieve certification depends on several factors such as firm size and sector, amount of existing documentation, management commitment, etc. Furthermore, according to Johnson (1998), the first three months firms generally spend in planning, organising and training. The next six months are spent documenting their quality system and beginning the internal audits. The system is allowed to operate at least three months prior to certification audit in order to provide evidence for the registrars.
Obtaining certification is not the end of the process since the certification is not given indefinitely. In fact, the firm has to undertake regular audit supervision which usually occurs once or twice a year. The purpose of audit surveillance is to verify that the quality system functions appropriately. As well as these regular audit surveillances, the firm has to submit a complete re-audit every three years which presents a complete assessment of the quality system.
Advantages of the ISO 9000 implementation
Benefits of ISO 9000 certification could be identified on both internal and external levels. Internal advantages include increased customer demand, improved company quality image and competitiveness on the market, compliance with customer requirements. External advantages include streamlined procedures and documentation, increased awareness of preventive and corrective actions and provision of foundation for TQM, lower operating costs or achieving external benefits, higher profitability. The literature suggests that the most prominent reason for implementing the ISO 9000 certification is that customers prefer to buy from firms that are ISO 9000 certified (Rao et al., 1997).
Disadvantages of the ISO 9000 implementation
Beyond the discussion of the benefits of the ISO 9000 certification, some criticisms have been raised as well. As we discussed previously, one of the main disadvantages of the ISO 9000 certification is the certification process itself. Furthermore, the regulation and implementation of the standards were left up to the participating countries’ individual standard organisations, which select the agencies qualified to issue the ISO 9000 certification. Once registrars become accredited, there is no single set of guidelines for them to follow. Hence, the registration process can vary according to the registrars. In the past, not all companies or countries would acknowledge certification from all registrars because standards had been interpreted somewhat variably in different countries. Consequently, companies such as Hewlett-Packard, Motorola, Novell, Microsoft, etc led a self-certification movement, which provided greater flexibility in meeting objectives, reduced costs and heightened customer understanding of the Quality Management systems.
Another issue that has emerged is that ISO 9000 is not industry-specific. Some critics claim it is too general and fails to address the unique problems and issues inherent in some industries. In fact, ISO 9000 registration is strongest in the transportation, chemical, oil, electronics and computer industries.
Generally, the most frequently voiced criticisms are the costs of achieving the ISO 9000 certification. Four major factors generate costs in achieving the ISO certification: time, training, consultants and the registration itself. The amount of time needed to become certified ranges from less than a year to more than two years, but usually takes from about a year to 18 months. It depends on many factors, including firm size and sector of activity, current level of work quality, extent of current documentation and degree of management commitment. Furthermore, 6 to 12 months of training is necessary for the firm in order to adapt procedures to the ISO standard. Hiring consultants to facilitate the process also contributes to the costs of the ISO certification. An example of the cost of ISO 9000 certification is given by Anderson et al., (1999). The authors report that obtaining ISO 9000 certification in the manufacturing sector in the U.S. takes from 9 to 28 months and approximately 35-40% of all sites fail the first audit. The costs of the standard adoption and certification are substantial. A medium size manufacturing facility employing 100 people can expect to spend $50 000. For larger firms (sales from $100 million to $500 million), the average cost that the authors report is $300 000. Moreover, adoption of the ISO certification may induce the shadow prices (Diaye et al., 2008) that can be high as the cost of ISO implantation. In order to avoid the shadow prices, managers have to insist on employees’ participation and training during implementation process.
The global diffusion of ISO 9000
As we notice from the Figure 1.1, by the end of 2007, the ISO listed 951 468 ISO 9001 certificates in 175 countries. Furthermore, the ISO 9001 growth seems to face a net decline in 2007. Indeed, we observe an increase of 54 557 certificates in 2007 vs 123 062 in 2006 and growth of 6% in 2007 vs 16% in 2006. According to the ISO, the decline could be influenced by various factors such as:
• the changes of methodology;
• the new edition of ISO 9001 induces wait-and-see-attitude of firms, as was the case for ISO 9000:2000 version;
• certain countries have reached full growth or maturity;
• gathering certificates in companies with multi-sites.
The diffusion of ISO 9000 standards differs among different geographical regions. The level of ISO certification may sometimes reflect the level of a country’s development level. However, the absolute number of ISO certification may hide certain disparities. Therefore, ideally we need an indicator that will measure the number of the certifications by the size of population or by Gross Domestic Product (GDP). The following discussion examines only the absolute number of ISO 9000 standards, hence we can not discuss differing levels of economic development within different countries.
As previously, in 2007, Europe, presents 46% of the ISO 9001 distribution in the world (Figure 1.2). Moreover, we may notice a great increase of ISO 9000 distribution in the countries of the Far East which account for 36% of total world’s certificates. Hence, just Europe and the Far East concentrate 82% of the ISO 9001 certificates in the world. North America and Australia-New Zealand have lost 2% and 1%, respectively, compared to the previous year. This loss goes to South and Central America that gain 1% each.
Furthermore, the Far East also sees a decline in the growth of certification, since the number of certificates increases only 15% – almost 45 000 additional certificates. On the top of the world list is China, with 210 773 ISO 9001 certificates at the end of 2007 (or more than 22% of certificates delivered in the world). On the other side, Japan saw a steep decline in the growth of certification. Actually, Japan records a loss of 3 000 certificates during one year.
Africa and East Asia, as well, saw a significant slow down in their growth of certification (only +10%), particularly due to sluggish growth in India. However, with 5 124 additional certificates, India passes from the 7th to the 5th world position in ISO 9001 certification.
South and Central America are the only regions that have maintained a superior growth compared to the previous year (+ 34% or 10 000 additional certificates).
The analysis of Figure 1.4 is based on the 27 countries that are members of the European Union (EU). The ISO 9001 certificates awarded in the EU countries represent approximately 40% of the certificates awarded in the world or around 385 255 certificates. Hence, the first impression about this data is that EU countries lost 2% of their certificates comparing to 2006.
With 11 359 certificates, Italy pursues its “race” on the top of the list, far from the other countries in the EU and records the strongest progression in 2007, obtaining two additional points comparing to 2006 (a growth of 9% or 9 560 additional certificates). For the third consecutive time, Spain is in 2nd position and represents 17% of the delivered certificates in the EU. It gains 2 additional points compared to the previous year. Portugal is also among the countries with the strongest growth in 2007. The United Kingdom has lost almost 54 000 certificates and declines 3 points in 2007. France preserves the 5th position and represents, as previously, 6% of the delivered certificates of the EU.
Together, the 27 countries of the EU record a growth of 2% during 2007, but the data “hides” significant disparities among the countries . After 3 years of growth, Germany notes a decrease of 3% in 2007. The United Kingdom follows its previous decline and count 35 517 certificates having lost 30 000 certificates in 6 years. It seems that France resists any decrease and it records a growth of 8%. Finally, we have to underline that Bulgaria and Belgium saw a great increase of around 10% in 2007.
As we indicated previously, France is still in 5th position on the European level and 9th on the world level with 22 981 certificates at the end of 2007 (Figure 1.5). Hence, it gathers 6% of the certificates delivered in the EU and 2% of the certificates delivered in the world. The ISO data shows that France picks up growth in 2007 (+8% that corresponds to 11 632 additional certificates). Interestingly, between 2000 and 2007 the average increase of certificates has been 830 per year, while between 1995 and 2000 it has been 2 300 certificates per year. This could be explained by different facts. For instance, as indicated by the ISO, the development of specific quality references for specific sectors may have a negative impact on the growth of the ISO 9001 certificates in France.
Table of contents :
PART I – THE DESCRIPTION AND DETERMINANTS OF QUALITY AND ENVIRONMENTAL MANAGEMENT PRACTICES
Introduction of the first part
Chapter I – The description and determinants of adoption of Quality Standards: A comparison between the manufacturing and service sectors
Chapter II – The description and determinants of Environmental Standards: A comparison between ISO 14001 and Responsible Care
PART II – THE EFFECT OF QUALITY AND ENVIRONMENTAL MANAGEMENT TOOLS ON FIRM PERFORMANCE
Introduction of the second part
Chapter III – Do Quality and Environmental Standards Improve the Business Performance of French firms?
Chapter IV – From Quality to Innovation: Evidence from two French Employer Surveys
Chapter V – Green Not (only) for Profit: An Empirical Examination of the Effect of Environmental
Standards on Employees’ Recruitment
Chapter VI – ISO 9000 Standard as a Club Good: Network Effect Evidence
PART III – THE EFFECT OF QUALITY AND ENVIRONMENTAL MANAGEMENT TOOLS ON EMPLOYEE OUTCOMES
Introduction of the third part
Chapter VII – Quality and Environmental Practices: The Tools for Improving Working Conditions?
Chapter VIII – How Green is my Firm? Worker Well-Being and Job Involvement in Environmentally
Certified Firms
General Conclusion
