Insights Into the Effects of Quality Management Systems on Financial Performance

Download or read book Insights Into the Effects of Quality Management Systems on Financial Performance written by Nada Hisham El-Hassan and published by . This book was released on 2005 with total page 226 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the current fiercely competitive global business environment, quality has grown to be the foundation for organizational survival. Organizations have come to see quality as the one indispensable strategic tool. ISO 9000 families are the world 's most popular and widespread international standards on quality management systems. According to experts, there has been a dramatic change in the concepts for quali ty management between ISO 9000:1994 to ISO 9000: 2000 series. The bulk of research evidence on the financial performance of the certified organizations is anecdota l. The objective of the research is to identify a set of relevant variables that ar e factors that can affect financial performance of organizations implementing ISO 9000: 2000 standards. Then, the research tries to establish whether ISO 9000: 2000 certifications have positive or negative impacts on these variables. The research compiles matching companies from two databases: Quality Digest ISO2000 database and Compustat Global Data Guide in order to arrive at a sample of publicly listed organizations and that have implemented ISO 9000: 2000 quality management principles. The final sample used in testing is data on 166 companies over the period 1996-2004 with one of four certification event years 2 000, 2001, 2002, 2003. The pooled sample was grouped according to market capitalizati on, whether small, medium or large-cap. A set of variables are identified through wh ich statistical associations are utilized to study the differences between pre, duri ng and post certification event. Applying t-statistic test of means and f-distribution test of variance according to the various set hypotheses, the research arrives at conclusions reg arding financial performance. We note that the major contribution of this research is that it is considering t he quantitative analysis of ISO 9000: 2000 certifications as opposed to all availab le literature that are based on the ISO 9000: 1994 and other older versions of the standard. This research presents a more comprehensive set of variables to measure financia l performance of quality driven organizations. It provides documented quantitative statistical evidence on effects of quality management systems implementation on financial performance.