ISO 9000 Is Ineffective - Team 2 Rebuttal - ASQ

ISO 9000: Is It Worth It?

Team 2 Rebuttal - ISO 9000: An Ineffective Quality System

Chris Heffner, Steven C. "Swede" Larson, Barney "Tim" Lowder, Michael Matthews and Patti Stites

Team 1's premise is that ISO 9000 certification is beneficial for an organization because it provides significant rewards. We believe, however, that the ISO program is neither a panacea nor an effective tool for ensuring quality throughout an organization, especially continuous quality improvement.

In this rebuttal, we will address Team's 1's positions on ISO 9000's importance, the views of scholars, and ISO 9000's effectiveness related to Total Quality Management, profitability, and competitive advantage.

ISO: A Broad Look at its Importance

Team one justifies ISO 9000, in part, by stating that ISO is an internationally developed set of standards, and thus consists of broad inputs and applications for enterprises across the globe, which can be adapted to meet a specific organization's needs. In reality, the standards were developed, and are still overseen, by a technical committee, ISO/TC 176, which includes experts from limited fields in the industrial, technological, and business sectors. Johannsen (1995) asserted that the standards are better-suited to industrial manufacturing than to professional services or services in general. The technical sectors for the standards alone would seem to preclude many smaller businesses, and even developing countries with limited infrastructure, limited and technology and difficulty with agriculture, food, and the distribution of goods. Implementation of ISO Programs is difficult at best, and prohibitively costly in countries such as New Zealand, where 87% of businesses have fewer than five employees and 92% have fewer than twenty. The vast majority of New Zealand's industry seems to be left out by both the cost and rigidity of these standards (Mann & Grigg, 2004).

Team 1 also says a strength of the ISO 9000 concept is its objectivity, and the credibility associated with having an independent third-party registrar issue a certificate of endorsement. On the contrary: Tsiotras and Gotsamani (1996) noted that selecting a registrar can be challenging. There are numerous certification bodies available, but not all registrars are widely respected or recognized. Therefore, the third-party audit system may not provide the objectivity that is claimed by proponents of the program.

Some anecdotal evidence: A search of an online, informal Google chat forum on "miscellaneous industry quality" in March 2003 revealed comments from QMS auditors suggesting that "bad ISO certificates" could mislead customer thinking. One participant, who claimed to be an auditor from China, said he has been shown ISO 9000 certificates for systems that had not yet been established. His comments: "If someone shows you a certificate, don't trust it. ISO is a good management standard but it doesn't mean that all the systems behind the certificates are good too." We think it's significant that this observation was made well after the ISO 9000 standard revision of 2000.

What Scholars Say About ISO

Team 1 offers a substantial list of scholarly references that are purported to support the various motivations, drivers and benefits of ISO 9000 certification. But most of the research cited by the team predates the 2000 revision. Additionally, many of these same researchers also pointed out severe flaws in the ISO 9000 program.

For instance, Dick (2000), listed as a source in support of ISO 9000, reviewed several studies, and while he acknowledged that some companies report increased performance, his overall conclusion was that ISO certification "has little or no explanatory power in terms of organisational [sic] performance." He also concluded that "there does appear to be some evidence that accreditation can be achieved too easily by those who just want the badge." And, he said, companies that did realize increased profits may have done so as a result of their motivation to seek improved quality, not because of the ISO certification itself.

Tsiotras and Gotsamani (1996), in another study included in defense of ISO 9000, agreed with other authors that many companies seek certification "just for the sake of it." They added that the real value in any quality improvement program is continuous improvement itself, not necessarily the initial certification, and they listed a number of problems with ISO 9000, including:

  • Low flexibility and slow response to change.
  • Lack of correlation between certification and high quality or increased customer satisfaction.
  • An excessive obedience to documented procedures, which may discourage critical thinking.
  • A lack of focus on continuous improvement beyond the achievement of certification.

A report by Vloeberghs and Bellens (1996) is also listed as a source in support of ISO 9000, yet the authors argued that the ISO 9000 system does not put enough emphasis on process improvement, and does not address the strategic management frameworks that should be the basis for quality management. In their survey, a large percentage of managers stated that they would like to see ISO 9000 move more toward Total Quality Management and focus more attention on results, as opposed to documentation. Among 30% of their respondents, the company's human-resources department played no role in the ISO certification, even though  81% said they believed that the involvement of HR was a necessary component. Further, 61% of the respondents said that the biggest disadvantage of ISO 9000 was the enormous administrative burden. Second to this was lost flexibility, reported by 12% of the respondents. Interestingly, the two top-rated external advantages cited for ISO related to having certification, as opposed to improving quality or customer satisfaction.

Numerous researchers have shown that ISO 9000 has few implications for improvement in leadership (for examples, see Tsiotras & Gotzamani, 1996; Karon, 1996; Valenti, 1993; Chatterjee & Yilmaz, 1993; and Geri, 2005). The necessity of culture change initiated by leadership in order to achieve an effective quality program is also well-documented in the literature (for examples, see Claver, Gasco, Llopis, & Gonzalez, 2001, and Savolainen, 2000). If a program aimed at improving quality is too cumbersome or difficult, and does not address issues such as leadership and culture change, it may not be the most effective program available.

Finally, Mo and Chan (1997), cited by Team 1 as a source for the ISO benefit of increased profitability, noted that businesses must be ISO certified in order to do business with European industries. Thus the argument that certification increases opportunities for export and expansion to the international market may have nothing to do with the actual benefits of quality improvement, but may merely be a reflection of the company's securing of the certification document itself. The researchers also admitted that many companies find ISO 9000 certification too time-consuming and overly formalized and impersonal.

Team 1's point that the standards created by ISO 9000 are detailed in 620,768 pages is actually a testament to the time and burdens that certification places on companies wishing to compete.

Return on Investment?

Team 1 supports the idea that ISO certification enhances profitability. But Wayhan, Kirche, and Khumawala (2002) observed that certification has very little impact on financial profitability, and that any profitability that is improved dissipates over time. In a survey of more than 600 firms in the United Kingdom, Batchelor (1992) found that 85% gained no increase in profitability due to quality certification. Likewise, Terziovski et al. (1997) surveyed 1000 firms in Australia and New Zealand and found no positive relationship between certification and business performance.

Seddon (1997, cited in Dick, 2000) even goes so far as to suggest any impact from implementation of ISO 9000 is actually negative. One comment made by a participant of the study seems to sum up Seddon's view: "Our printer announced that he could no longer supply us with quotations over the telephone. He had become registered to ISO 9000 and this meant that paperwork had to go between us. Even using the fax, we found that quotations now took at least four days. We changed printers."

Relationship to TQM and Competitive Advantage

Does ISO implementation really lead to further incorporation of the quality practices of TQM within an organization? Johannsen (1995) asserted just the opposite, saying that the ISO concept does not incorporate the advances of TQM because it is "narrow, static and emphasized conformance to specifications." Quazi, Hong, and Meng (2002) agreed that the ISO focus on standardization reduces creativity and continuous quality improvement efforts. After overseeing more than 50 ISO registrations, Bill Robinson (cited in Clifford, 2005), argued that ISO is not one of the better systems that can be used for process improvement. Clifford added that the ISO Certification Program can assist in raising a company's quality, but because of the stringent regulations and specifications, the processes eventually stifle long-term quality improvement.

There is also much discussion in the literature of the high levels of human and financial resources required for implementation. According to Barnes (2000) certification can be expensive. While costs do vary with organization size and complexity, the average cost of certification is estimated at $245,000, which is out of reach of many smaller companies. Mo and Chan (1997) found in their survey of small and medium sized businesses that cost was the number one reason some chose not to seek certification. Tsiotras and Gotzamani (1996) also found that the costs of becoming certified were too great for many small companies to afford. Similarly, the ISO 9000 program does not offer the opportunity to compete without investing resources: Companies must adopt the standard before being allowed to participate. Since many small businesses cannot afford the cost of certification, even if they are committed to quality, competition is thus actually decreased by ISO 9000, allowing the larger corporations to compete with each other while pushing out smaller competitors.

Conclusion

ISO 9000 may have served its purpose in the 1980s, but it has since become bogged down by documentation and a failure to adapt to the changing needs of industry. The world has moved on – communications and technology available today were hardly imagined a mere 20 years ago -- and the need for flexibility and rapid change runs counter to ISO's reliance on standardization and detailed documentation. Further, ISO has kept smaller companies from competing in many industries and for many government contracts.

While Team 1 argues that ISO 9000 provides companies with advantages, even after 20 years the research remains inconclusive, at best, regarding the benefits of the program. While businesses need TQM and continuous quality improvement to successfully compete, ISO 9000 may no longer be an answer.

References

  1. Barnes, F. (2000). Good business sense is the key to confronting ISO 9000. The Review of Business, 21(1/2), 11-15.
  2. Chatterjee, S., & Yilmaz, M. (1993). Quality confusion: Too many gurus, not enough disciples. Business Horizons, 36(3), 15.
  3. Chow-Chua, C., Goh, M., & Wan, T. (2003). Does ISO 9000 certification improve business performance?. The International Journal of Quality and Reliability Management, 20(8/9), 936.
  4. Claver, E., Gasco, J. L., Llopis, J., and Gonzalez, R. (2001). The strategic process of a culture change to implement total quality management: A case study. Total Quality Management, 12(4), 469-482.
  5. Clifford, S. (2005, May). So many standards to follow, so little payoff. Inc.com Web service: .
  6. Dick, G. P. M. (2000). ISO 9000 certification benefits, reality or myth? The TQM Magazine, 12(6).
  7. Geri, N., and Ronen, B. (2005). Relevance lost: The rise and fall of activity-based costing. Human Systems Management, 24(2), 133-144.
  8. Google group "misc.industry.quality" (3 March 2003). "Maybe we should say ISO9000 certification have [sic] died?"
  9. Johannsen, C. (1995). Application of the ISO 9000 standards of quality management in professional services: an information sector case. Total Quality Management, 6(3), 231-242.
  10. Karapetrovic, S., & Rajamani, D. (1997). ISO 9000 for small business: do it yourself. Industrial Management, 39(3), 24-31.
  11. Karon, P. (1996). Confronting ISO 9000. InfoWorld, 18(31), 61.
  12. Mann, R., & Grigg, N. (2004). Helping the Kiwi to fly. Total Quality Management & Business Excellence, 15(5/6), 707-718.
  13. Mo, J. P. T., & Chan, A. M. S. (1997). Strategy for the successful implementation of ISO 9000 in small and medium manufacturers. The TQM Magazine, 9(2), 135-145.
  14. Quazi, H. A., Hong, C. W., & Meng, C. T. (2002). Impact of ISO 9000 certification on quality management practices: A comparative study. Total Quality Management, 13(1), 53-67.
  15. Savolainen, T. (2000). Towards a new workplace culture: Development strategies for employer-employee relations. Journal of Workplace Learning, 12(8), 318.
  16. Seddon, J. (1997). Ten arguments against ISO 9000. Managing Service Quality, 7(4), 162-168.
  17. Tsiotras, G., & Gotzamani, K. (1996). ISO 9000 as an entry key to TQM : The case of Greek industry. International Journal of Quality and Reliability Management, 13(4), 64-76.
  18. Valenti, M. (1993). In search of quality ... American firms turn to ISO 9000. Mechanical Engineering, 115(4), 42.
  19. Vloeberghs, D., & Bellens, J. (1996). Implementing the ISO 9000 standards in Belgium. Quality Progress, 29(6), 43-48.
  20. Wayhan, V. B., Kirche. E. T., & Khumawala, B. M. (2002, March). ISO 9000 certification: The financial performance implications. Total Quality Management, 13(2), 217-231.

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