Quality certification and company performance – the newly developed country experience

Abstract

This study investigates the impacts of ISO 9001:2008 certification on companies in Malaysia. Data were collected from CEOs and managers through a questionnaire survey. A multivariate analysis and SPSS macro were used as statistical techniques to assess the effects of ISO 9001 certification. Results of the study indicate that ISO 9001 certified companies were having significantly greater benefits and financial performance compared to non-certified companies. However, no significant direct relationship between ISO 9001 certification and company's financial performance was found. A further investigation revealed that financial performance is actually directly related to quality and local and international business performance, which are significantly influenced by ISO 9001 certification. Therefore quality and business performances are involved in the mediational process between the financial performance of companies and ISO 9001 certification. The novelty of this research lies in the establishment of, for the first time, high level statistical relationship between ISO 9001 certification, its mediating factors and financial performance of companies.

Keywords:

• quality management
• multivariate analysis
• manufacturing and service companies
• company performance
• internal and external benefits
• Malaysia

JEL Classification:

• L15
• L21
• M00
• M11
• M163M21

Additional information

Notes on contributors

Mohammad Mazharul Islam

Mohammad Mazharul ISLAM is an Associate Professor in Finance at King Abdulaziz University, Jeddah, Saudi Arabia. He has published over 30 articles in reputable Journals and Conference proceedings and regularly reviews papers from reputed Journals. His research interests lie with the broad areas of economics, management, sustainable procurement, research methods and statistics, and social capital. Dr Islam has obtained substantial research grants totalling approximately $1.9 million.

Essam Habes

Essam HABES is an assistant professor and head of the economics department at King Abdulaziz University, Jeddah, Saudi Arabia. He earned his Ph.D from the State University of New York at Binghamton, U.S.A. His research and teaching interests include econometrics and urban and regional economics.

Azharul Karim

Azharul KARIM is a senior lecturer in mechanical engineering at Queensland University of Technology, Australia. He has made significant contribution in product quality and manufacturing process improvement. He has published over 110 technical articles in reputable Journals and Conference proceedings and regularly reviews papers from reputed Journals. His current research interests include product quality and effective manufacturing practices, lean manufacturing, manufacturing data mining and solar drying. Dr Karim has obtained substantial research grants totaling approximately $2.2 million.

Syed Omar bin Syed Agil

Syed Omar bin SYED AGIL is a Professor and CEO of Institute Professional Maitulmal, Kuala Lumpur, Malaysia. He has authored, co-authored and co-edited 17 books and monographs. He has also written 47 articles in Journals and local newspapers and presented 48 papers at local and international seminars and conferences. He has also produced several case studies relating to management and economics. Dr Omar has obtained substantial research grants totalling approximately $1.4 million.