Sharing the ‘fame’ of ISO standard adoption: quality supply chain effects evidence

Abstract

The objective of this paper is to provide an empirical evidence for whether the hierarchical position (determined by firm’s quality strength) of different types of quality supply chain categories implies the same hierarchy in terms of economic gains. Using data collected in France through a survey, we distinguish between four types of quality supply chain categories that help us to empirically construct a relationship between firms and their suppliers (quality certified/non-quality certified). Our findings, from a two-regime switching model, reveal that there is a positive correlation between the hierarchical positions of the quality supply chain categories and the impact on firm performance (measured by profit per employee).

Keywords:

• ISO 9000 standard
• supply chain
• firm’s performance

Notes

The authors started this paper when Sanja Pekovic was a PhD student in the Research Unit Dynamics of Organisations and Work at the Centre d'études de l'emploi and University Paris-Est. Sanja Pekovic gratefully acknowledges the financial support for this work from the AFNOR ‘Performance des Organisations’ endowment in collaboration with the Paris-Dauphine Foundation.

1. Club Goods are classified as a subtype of Public Goods that are excludable but non-rivalrous.

2. Direct Complete Quality Supply Chain includes companies that have ISO 9000 certification, and their (largest) suppliers are also ISO 9000 certified; Direct Non-Complete Quality Supply Chain contains firms that are certified with ISO 9000 certification, but their suppliers are not; Indirect Quality Supply Chain includes firms which are not ISO 9000 certified, but their suppliers have ISO 9000 certification; and Non-Quality Supply Chain includes firms that are not ISO certified, and whose suppliers do not have ISO 9000 certification.

3. More details about the design and scope of this survey are available on www.enquetecoi.net: Survey COI-TIC 2006-INSEE-CEE/Treatments CEE.

4. For parsimony, only the predicted means that come from switching model are presented. The results of the switching model estimation are available from the authors upon request. It is noteworthy that generally the obtained findings tell us that there is evidence of endogeneity. Thus, we may conclude that our econometric model is appropriate.

5. In order to check the consistency of our results, we use added value as additional indicator of firm performance. The obtained results are going in the same direction as using profit as indicator of firm performance. The results are available from the authors upon request.