A Study On ISO 9001 Quality Management System Certifications - Reasons .

September 2011A Study on ISO 9001 Quality Management System Certifications – Reasons behind the Failure of ISOCertified OrganizationsGlobal Journal of Management and Business ResearchVolume XI IssueIXVersion I44required factories to document their manufacturingprocedures and to prove by record-keeping that theprocedures were being followed. The standard was BS5750, and it was known as a management standardbecause it specified not what to manufacture, but howthe manufacturing process was to be managed. In1987, the British Government persuaded theInternational Organization for Standardization (ISO)having member countries more than 180, to adopt BS5750 as an international standard. The internationalstandard was named ISO 9000 series. ISO 9000:1987had the same structure as the British Standard BS 5750,with three models for quality management systems, theselection of which was based on the scope of activitiesof the organizationISO 9000:1994 emphasized quality assurancevia preventive actions, instead of just checking finalproduct, and continued to require evidence ofcompliance with documented procedures. ISO9001:2000 combined the three standards 9001, 9002,and 9003 into one, called 9001. Design anddevelopment procedures are required only if a companyengages in the creation of new products. The 2000version sought to make a radical change in thinking byplacing the concept of process management front andcentre ("Process management" was the monitoring andoptimizing of a company's tasks and activities, insteadof just inspecting the final product). The new ISO9001:2008 was published on 15 November 2008. ISO9001:2008 uses the same numbering system as ISO9001:2000 to organize the standard. As a result, the newISO 9001:2008 standard looks very much like the9001:2000. No new requirements have been cations have been made like defining the scope ofcontrol on outsourced processes, validation of software,effectiveness of corrective/preventive action, control ofexternal documents, etc.b) Specifications of ISO 9001:2008 StandardThe overall requirements of ISO 9001:2008 areof 8 clauses in general, as below:-Clause 1 -ScopeClause 2- Normative referencesClause 3- Terms and definitionsClause 4 – Quality Management System: This clauserequires the intent of documentation required onorganizations starting from a Quality Policy, Qualitymanual and records appropriate for the organization.Clause 5 Management ResponsibilityThis clause specifies the requirements from thetop management in terms of top managementcommitment, appointing a management representative,establishing Quality policy, objectives and conductingmanagement reviews. 2011 Global Journals Inc. (US)Clause 6 Resource ManagementThis clause specifies the requirements to planthe resources, training them and maintaining records,including the work infrastructure and work environment.Clause 7.0 Product RealizationThis is the most important umbrella clause,where the sub-clauses can be excluded from the scopeof certification, if such clauses are not applicable to theorganization. This clause specifies the quality plan forthe products and services (7.1), Customer relatedprocesses (7.2) from identifying customer requirements(7.2.1), Contract review (7.2.2), communication withcustomers (7.2.3), for managing the Design &Devlopment (7.3) such as planning the design, designinputs, outputs, review, verification, validation andcontrol of changes.Clause 7.4 PurchasingThe organization must ensure that purchasedproduct conforms to the requirements. The type andextent of control will depend on the impact of purchasedproduct on the subsequent product realizationprocesses or the final product. The suppliers must beevaluated and selected based on their ability to supplyconforming products and criteria for selection,evaluation and re-evaluation must be defined. Theresults of evaluations and necessary actions must berecorded and records must be maintained.Clause 7.5 Production and service provisionThis clause specifies the requirements on theproduction or service set up to plan, schedule, instruct,calibrate, validate and preserve the products to ensureconformity to customer requirements.Clause 7.6This clause requires the calibration ofmonitoring and measuring equipments, including thesoftware validation.Clause 8 Measurement, Analysis And ImprovementThe organization must plan and implementmeasurement, monitoring, analysis and improvementprocesses needed to Monitor the customer satisfaction level. Plan and conduct internal audits Control of Non-conforming products. Manage the corrective and preventive action andestimate their effectiveness.c) Citations & Related Research worksISO management systems have gained achronic importance developed in the fielding ofmanaging quality since two decades. As remarked byRoger G.Schroeder (2008), “ ISO 9001 Certificationhas a major impact on worldwide quality practices.Many companies are demanding ISO certification fromtheir suppliers as a condition for doing business”. This

Many researches studied the ability of ISO 9001 inachieving its main objectives of adding value toorganization’s implementing it in differenteconomies in general or by different sectors inparticular. For example, Pan (2003) discussed ISO9001 & ISO 14001 implementation in Far EastCountries, namely in Taiwan, Japan, Hong Kongand Korea.The study involved investigating firms’motivation for certification, their implementationexperiences and the benefits received. The mainconclusion for implementing ISO 9001 in thesecountries was positive in general with somedifferences in motivation for and benefits gainedafter implementing ISO 9001. He concluded thatthere are common factors between these countriesto go for ISO 9001 certification, namely, externalpressure, gaining competitive edge, internal andexternal portions and improvement of publicrelations. The common benefits of ISO 9000certification among these countries are improvedcompetitive edge, and improved public relations. Naser et al. (2004) studied the effect of ISO 9001certification on the performance of 162 public listedcompanies in Malaysia and they found an 2011 Global Journals Inc. (US)Version IIX1. Pressure from existing customers (Johannes, 1996;Buttle, 1997).2. Pressure from parent organization (Johannes, 1996).3. Promotional benefit (Johannes, 1996).4. Competitors Registration (McAdam and Canning,2001).5. To improve internal efficiency (McAdam andCanning, 2001).6. To maintain/increase market share (Magd and Curry,2003).7. To help improve customer service (Douglas et al.,2003).45Volume XI IssueI. As Juran (1996) highlighted, “Assumptions aboutorganization’s Vision, Mission & Competencies must fitreality”, otherwise the organization’s QMS may exist inthe form of a certificate only. CEOs shall take due carebefore ISO certification, as what do they expect fromISO 9001 certification, in terms of value addition.II. Translating the so called values into businessequivalent is a challenging job, as revealed by JohnGarder(2004),”Most contemporary organizations andwriters are reluctant or embarrassed to write explicitlyabout values”.III. The very purpose of going for ISO, to streamline thesystem for sustaining advantage. Markides (2000)confided that “ The sustaining advantage is achievedby organizing its various activities into tight systems,which support and reinforce each other. In essence theadvantage is sustained because, while imitators mayadopt various ideas and techniques, the ability tomanage interfaces really well ”. On the contrary,assuming the organization being certified for a merecompliance to the minimum requirements with a loosesystem, the advantages also will be minimum or onetime, cannot be sustained.ISO management systems, regardless of theirrelease since 1987, have not been undertaken for anyresearch at India or in the gulf region till 2000. The wideacceptance of the ISO 9001 standard by more than aMillion organizations in more than 160 countries andbusiness economies (ISO Survey,2009) came from thegeneric requirements of the standard and it’sapplicability to all organizations, regardless of type, sizeand product / service provided (ISO 9001). As beenhighlighted by Pan (2003), ISO 9001 standard wasinitially adopted by firms in Europe and in countries withclose relationship with UK such as Australia and NewZealand. Nowadays is becoming the most popularstandard implemented by manufacturing as well asservice organizations. The drivers for ISO 9001certification vary from one company to another and fromone country to another, though the basic themessupporting 9001 were the customer satisfaction andcontinual improvements. Johannsen (1996) summarized these drivers aspressures from existing customers, promotionalvalue and the desire of improving managementprocesses and enhancing customer service. Buttle (1997) ranked the benefits after conducting asurvey on UK businesses and concluded that themost important benefit sought from certification isprofit improvement. McAdam and Canning (2001) argued theimportance of ISO registration in enhancing firm’schances of gaining work. Magd and Curry (2003) analyzed twelve motivationsfor ISO 9001 certification. A summary of the mainreasons of why companies adopt ISO 9001 can beframed as follows:Global Journal of Management and Business Researchsituation has caused lots of contracting organizations toregister for ISO certification. Joseph Juran (2002) said,“Initially the suppliers resisted the Quality Systemmandated by their customers, afterwards, it became apart of life”.The minimum compliance requirementsspecified in the 9001 shall be implemented consistently,to make the business reach the real “excellence”. BarakMichalle (2011) revealed “ the effective communicationwith customers, employees and stakeholders hasbecome challenging, even when conducted with samecultural framework ” It is essential to think of thatbusiness, if the stakeholder needs are not identified,achieved and communicated to them, the businesscannot flourish on long time, regardless of ISOcertification. There are certain business elements crucialfor the business excellence, which are not explicitlymentioned in the standard 9001.September 2011A Study on ISO 9001 Quality Management System Certifications – Reasons behind the Failure of ISOCertified Organizations

September 2011A Study on ISO 9001 Quality Management System Certifications – Reasons behind the Failure of ISOCertified OrganizationsGlobal Journal of Management and Business ResearchVolume XI IssueIXVersion I46association between ISO 9000 registration andperformance of companies in Malaysia. Their studyrevealed that accredited Malaysian companies outperformed the non-accredited ones during theperiod of their study. Casadesus et al.(2001) performed a study toevaluate benefits of implementing ISO 9000 bySpanish industries and they concluded thatalthough ISO 9000 has many positive points, butthese points must be used in right context tomaximize the benefits gained from the standard.The overall conclusion for the study was: More than90 percent of Spanish certified industries believedthat ISO 9000 had benefited them and it is a goodsystem for quality assurance. While in Canada, Bhuiyan and Alam (2004) studiedimplementing ISO 9001:2000 and they concludedthat there were some difficulties faced by Canadiancompanies in implementing the new standard andthese difficulties are varying based on differentcompanies characteristics like size, and years ofoperation. In a study for evaluating implementation of ISO 9000for 104 UK certified companies performed byDouglas et al. (2003). They concluded afterconsidering the views of quality professionalsparticipating in the survey that ISO 9001:2000 isvery positive and it is less disputing the criticisms ofthe old revision. They concluded also that the mainreason within UK organizations to seek ISO 9001certification was to allow them to tender for workthat otherwise unattainable. Magd and Curry (2003) studied ISO 9001 in Egyptand they concluded that the most common reasonsfor seeking certification in Egypt were to improve theefficiency of the quality system and pressures fromcompetitors/foreign partners. Also identifying the impact of the certification,Tzelepis et al. (2006) concluded that the overallISO’s effects on managerial inefficiency are negativeindicating that the adoption of ISO reducesmanagerial inefficiency. Quazi and Jacobs (2004) studied the impact of ISO9000 certification on training and developmentactivities in a sample size from Singapore and theyreach to the conclusion of gaining significantimprovements in training needs analysis, trainingdesign, training delivery, training evaluation, andhuman resource development activities werereported after implementing ISO 9000 by theseorganizations.Out of these researches completed in thesubject worldwide as cited above, most of them werecomparing the specifications of standards one-anotheror evaluating the impact of 9001 on a specific area suchas Staff motivation or market growth. So far there was 2011 Global Journals Inc. (US)no study conducted to evaluate the overall effectivenessof QMS and with suitable recommendations.S. Rajaram (2008) mentioned that “ISO 9001Certification had lot of advantages like Marketcompetitiveness, Consistency in Quality, improvedproductivity, employee involvement, staff morale andJob satisfaction ”, just similar to Mohamed Zairi andYasar Jarrar (2005) remarked “The practical benefits ofworking towards and achieving the standard are many.They include improved earning, productivity andprofitability ”, on the contrary, Zairi reveals a practicalsituation when the ISO system does not add value tomanage the business processes, by mentioning that“ISO 9000 Quality standard is not regarded as a majordriver of process performance as the company has apolicy on achieving these standards based oncommercial needs criteria”. If ISO 9001 is not acertification of choice, organizations, under pressure,might choose the shortest way to get certified, whichmay dilute the professionalism, make a mere bunch ofpapers, receiving no value addition, as mentioned byJames Highlands, “ This has been a huge effort in thecompany executives struggled to develop what turnedout to be a big dump documented system”.The above are the classic examples of how theISO 9001 standard, in spite of its vast applicability, isbeing misused by certain organizations. This was thestarting point to probe further on the effectiveness ofISO certified organizations in the contractingorganizations of UAE, who are mostly mandated by theircustomers to go for it.IV.MATERIALS & METHODSA survey was organized with a target group of100 contractors from UAE as responders. This includedMechanical , Electrical & Civil Contractors.The survey was organized through a formalgathering of key staff from these contractingorganizations. The important areas were discussed andtheir responses were reckoned to arrive at the survey.Data Analysis4.1. Customer Satisfaction :56% of organizationsstated that they maintain the same level of customersatisfaction before and after ISO Certification. 24%organizations were positive to improve their customersatisfaction, as a result of implementing ISO 9001System. 20% of organizations did not agree on any suchimprovement.4.2 Continual Improvements : 28% of respondentshad a formal account of the continual improvementsafter ISO certification. 44% respondents feltimprovements, but they were not sure whether it wasbecause of ISO QMS and also they did not have anyquantified figures behind such improvements.

4.17 Job responsibility, Authority and Accountability :36% of organizations were not aware of their job rolesand the accountability behind it. 28% responded toknow their roles well. 36% of respondents stayedneutral.4.18 In-process Quality & Efficiency : 32% of therespondents stated a clear improvement in the inprocess quality and efficiency since getting certified.20% stayed with no comments whereas 48% did notagree with in-process quality and efficiencyimprovements since certification.4.19Sub-Contractor Development : 56% oforganizations did not agree that the edsincecertification. 28% agreed to have improved initiatives onthe same since certification. 16% stayed neutral with nocomments.4.20 Key Performance reporting system : 12%respondents stayed neutral, 32% of the respondentshad a balanced score card system and 56% of therespondents did not have any such reporting system.4.21 Staff Capabilities : 16% organizations agreedthat they had professional methods to plan and develop 2011 Global Journals Inc. (US)47Version IBrand Image & Ease of Marketing : 60% ofrespondents were positive to agree that their brandimage and ease of marketing were improved aftergetting certified to ISO 9001. Respondents with nochange in this brand image & marketing before andafter certification was 40%4.4 Internal Audits : 32% of respondents revealed thattheir internal audit process was adding value to theirbusiness, 8% of respondents had been neutral whereas60% organizations denied to agree on any valueaddition by internal audits.4.5. Linking ISO with Business Strategy : 48% ofrespondents gave a shocking reply that the ISO modelin their organization had no interface to Strategy andvice versa. 32% of respondents stayed neutral byaccepting there was a strategy but unaware of how itwas linked to systems. 20% respondents felt positivelythat their strategy and systems were linked well eachother.4.6Documentation Issues : 52% of respondedorganization felt that the documents volume increasedafter ISO certification, 36% felt the same volume ofdocumentation before and after certification where as12% organizations were happy to streamline and reducethe paperwork after ISO certification.Cultural & Behavioral Issues:4.752% oforganizations revealed it was very difficult to maintainthe System culture and team relationships when thedata and information need to be shared within theorganization and people need to work as a team. 16%felt a refined culture and behavior in the organizationsince ISO certification. 32% remained neutral and didnot comment anything.4.8 Management Commitment: 32% of therespondents revealed a positive commitment from theirtop management, 52% did not agree on the adequatecommitment by top management. 16% of organizationsdid not have any comments.4.9 Motivation & Recognition : Even though mostorganizations had a HR mechanism for promotions,increments, etc 64% organizations felt the staff role inISO system and achievements were not the basis forrecognition, but the sales & operational performanceonly. 24% respondents were happy to get motivated andrecognized for their contribution related to Qualityimprovements. 12% of respondents were neutral.4.10 Bureaucracy in Systems : 56% of respondentsfeel the necessity to re-engineer their end to endprocesses and eliminate non-value adding processes.24% respondents had no bureaucracy issues. 20% ofthem had no comments.4.11 Customization : 52% of organizations respondedas their system, policies and objectives were not tailoredto suit their business and seemed so generic.44%organizations claimed to have a well customizedsystem. 4% of respondents were not aware on the levelof customization.4.12 Internal Communication : 68% of organizationswere happy with a well established internal network rs, meetings, seminars including the state ofart technologies like GPRS. 20% felt a boring formal wayof communication primarily by letters. 12% stayedneutral.4.13 ISO Awareness : 64% of respondents felt thattheir staff were aware of their system, its policy and theobjectives related to them. 20% of respondents werefacing a challenge in promoting the system awarenessand 16% stayed neutral.4.14 Organizational Learning : 56% of organizationsresponded of no common mechanism to benchmark orlearn the best practices within various departments ofthe organizations or outside the organization. 32% of therespondents replied that their organization encouragesknowledge sharing and 12% did not have any relevantidea.4.15 Customer Complaints : 36% of respondentsclaimed to reduce the customer complaints aftercertification. 24% of respondents did not accept toreduce customer complaints since certification. 40% ofrespondents were neutral that there is no change in thenumber of complaints before and after certification.4.16 Customer feedback : 28% of the respondentsagreed with an effective feedback system beingavailable at their company. 52% did not agree that theyhave any effective means to measure the customerfeedback. 20% stayed neutralIXcontinualVolume XI Issue4.3anyGlobal Journal of Management and Business Research28% organizations denied ofimprovements after ISO certification.September 2011A Study on ISO 9001 Quality Management System Certifications – Reasons behind the Failure of ISOCertified Organizations

September 2011A Study on ISO 9001 Quality Management System Certifications – Reasons behind the Failure of ISOCertified OrganizationsGlobal Journal of Management and Business ResearchVolume XI IssueIXVersion I48staff capabilities. 24% organizations had no idea on thesubject.60% organizations denied that they had anysuch system.4.22 Stakeholder Perception : 56% organizations hadno formal measure to understand and fulfil stakeholders’perception, but customers. 12% stayed with nocomments and 32% respondents had a mechanism toobtain the perception of their stakeholders.4.23Management Review : 24% of the respondentsagreed that the management review in their companyconducted professional reviews beyond the minimumrequirements of ISO. 56% did not agree that they haveany effective review mechanism, but a typical document.20% stayed neutral.4.24Corporate Social Responsibility: 36% oforganizations were not aware of their corporate socialinitiatives. 28% responded to demonstrate socialresponsibility. 36% of respondents stayed neutral.4.25 Overall System effectiveness44% of:respondents had opinion that their organization haseffective quality systems after certification, 56%respondents felt that their system was not effective evenafter certification .4.26Hypothesis Testing : Primary data collectedwere analyzed for the internal relationship betweenvariables. Hypothesis testing was carried out for 9constructs as below:As an example, the first one is illustrated belowin the tables 2 & 3:HO : Null hypothesis: There is no relationshipbetween internal a

of just inspecting the final product). The new ISO 9001:2008 was published on 15 November 2008. ISO 9001:2008 uses the same numbering system as ISO 9001:2000 to organize the standard. As a result, the new ISO 9001:2008 standard looks very much like the 9001:2000. No new requirements have been added. However, some important clarifications and