The impact of ISO 9001 effectiveness on the performance of service companies

Abstract

PurposeThe purpose of this paper is to define and subjectively measure ISO 9001 effectiveness as the achievement of the standard's objectives and determine its impact on the performance dimensions of service companies related to product/service quality, operational and financial performance.Design/methodology/approachAn empirical study was carried out using a sample of 100 ISO 9001:2008 certified service companies. Data were obtained from the quality managers of the companies through a structured questionnaire. Exploratory factor analyses are applied to extract the latent factors of the indicators of ISO 9001 objectives and performance dimensions. Multiple linear regression analyses are also applied in order to determine the impact of ISO 9001 effectiveness on the performance dimensions of service companies.FindingsThe findings of the present study confirm the dimensionality of the ISO 9001 effectiveness (evaluated by the degree of achievement of the standard's objectives, namely prevention of nonconformities, continuous improvement and customer satisfaction focus) and reveal its significant contribution to the performance of the service companies. The product/service quality and operational performance of the service companies are directly and significantly influenced by ISO 9001 effectiveness. However, the financial performance is directly influenced only by operational performance, while the impact of ISO 9001 effectiveness is indirect through its significant correlation with operational performance.Research limitations/implicationsThe sample of the responding ISO 9001 certified service companies is limited to small and medium‐sized enterprises (SMEs) from one country (Greece). Moreover, the introduced instrument is of subjective nature as the data collected through quality managers may be biased regarding ISO 9001 effectiveness and company performance. Furthermore, the influence of ISO 9001 effectiveness on service company performance with regard to market share and customer satisfaction has not been determined. The above limitations suggest future research recommendations.Practical implicationsBy defining ISO 9001 effectiveness based on its objectives, managers may be aware of what to improve to increase the standard's effectiveness and therefore directly improve service company performance in terms of quality and operative results and indirectly in terms of financial results.Originality/valueBased on the core issues of ISO 9001 effectiveness this empirical study confirms its multi‐dimensional structure and determines the contribution of ISO 9001 effectiveness to specific performance dimensions of service companies.