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Description:
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Quality and quality related issues have been a topic of research interest in the business field for sometime . Quality management practices are seen as a competitive advantage . The conventional wisdom is that better quality leads to higher revenues , decreases costs , and increased profits . Empirical archival financial studies concerning the link between quality and financial performance have been difficuU because the area of quahty management practices suffers from multiple definitions , varying degrees of implementation , and lack of specific implementation dates . These difficulties limit researchers' ability to examine the cost /benefit relationship between quality management and financial improvements .
This dissertation attempts to overcome some of these research difficulties by focusing on firms that become ISO 9000 certified . ISO 9000 is a quality standard that provides guidelines that are generic and can be applied to any type of organization . Specifically , the effect of ISO 9000 certification on financial performance in the elecfronics industry is examined in this dissertation . Hypotheses and control variables were developed from resource advantage theory and the quality , ISO 9000 , adaptive assets , and research and development literatures .
Publicly available financial data was gathered for both ISO 9000 certified and non -certified companies and used to test the hypotheses . Pooled cross -sectional regressions were used in the testing of the hypotheses .
The results of this study were mixed . However , in general they failed to support the major hypotheses . Firms that were ISO 9000 certified (and therefore following a quality management practice ) did not have greater financial performance than did firms that were not ISO 9000 certified . Furthermore , ISO 9000 certified firms actually saw their financial performance decline after they became ISO 9000 certified when compared to the financial performance before becoming ISO 9000 certified . |