Small Firms and the ISO 9000 Approach to Quality Management

Abstract

DR. FRANCIS CHITTENDEN IS SENIOR FELLOW in business development, Dr. Pannikos Poutziouris and Dr. Syeda-Masooda Mukhtar are fellows in SME management, all at Manchester Business School, England. This paper reports the findings of a large survey about the international quality standard ISO 9000. The paper compares the characteristics of small businesses that use ISO 9000 with firms that do not and explores the reasons why businesses decide to seek registration under the standard. The benefits and disadvantages experienced by the small firms that have registered are also considered. A number of policy recommendations are presented that argue that ISO 9000 should be adapted so that more small firms can enjoy the advantages of registration. ISO 9000 is a quality management system that relies on the formal documentation of operating procedures. However, most small businesses are managed informally through the personal attention of the owner(s) and they perceive ISO 9000 to be expensive to operate and too bureaucratic for their needs. Informally-managed small businesses that adopted ISO 9000 reported increased costs as a result of implementing the standard. The formality required by ISO 9000 prevents many small firms from enjoying the benefits of registration even though, in most cases, the quality of their products and services is satisfactory.