CHAPTER 1

INTRODUCTION

1
 CHAPTER 1
INTRODUCTION

INTRODUCTION TO QUALITY MANAGEMENT

Quality is considered to be one of the important factors for manufacturing organizations. It
has been realized that the quality is not an accident but is an aspect, which needs to be
managed in the organization. As a result of this understanding, a number of quality
management systems have been developed, which focus, not only on product quality, but also
on whole of the processes in the organization, which have a bearing on quality of product.
These quality management tools include TQM, Kaizen and ISO 9000 etc. Quality
improvement is one of the tools that companies have for trying to improve their market
position or, at least, to maintain it (Coulson- Thomas, 1992).
Indian manufacturers have just begun to realize that quality will play a greater role in the
future growth or even survival of their business. In fact, this may be the factor that could
decide the fate of this country in the twenty-first century. Several studies have examined the
quality management practices of Indian manufacturers (Motwani et.al., 1994; Jordan, 1997;
Raghunathan et.al., 1997). All these studies have used a general list of Indian manufacturers.
The statement that ISO quality standards are an adequate system for quality assurance can be
confirmed by the fact that only 0.8 percent of companies in the world have stopped
maintaining the quality standard. The success of the ISO 9000 family of standards is still
growing, and the number of countries where ISO 9000 is being implemented has increased
(Durand et.al., 1993).

EVOLUTION OF ISO 9001 STANDARD

The ISO 9000 series originated from the military procurement standards developed during the
Second World War, ultimately leading to the publication of the first commercial quality
management standards: BS 5750 by the British Standards Institute in 1979. In 1987, the
British Standards BS 5750 was adopted with a few changes as the international standards:
ISO 9000 (Boulter & Bendell, 2002). The standards were updated in 1994 with some minor
changes. The ISO 9000:1994 standards contained three auditable certification standards, i.e.
ISO 9001/2/3. They provided corresponding clauses for different types of business including
companies that design their own products and services (20 clauses), companies that do

2
everything except design (19 clauses), and companies whose products and services can be
verified only by inspection and tests (16 clauses). Major changes were incorporated in the
ISO 9001:2000 version.
The latest ISO 9001:2000 revision is based on the following eight quality management
principles:
(1) Customer-focused organizations;
(2) Leadership;
(3) Involvement of people;
(4) Process approach;
(5) System approach to management;
(6) Continual improvement;
(7) Factual approach to decision-making; and
(8) Mutually beneficial supplier relationships (biazzo & bernardi, 2003).
Based on these eight guiding principles, the 20 clauses of the ISO 9001:1994 were revised
into the following five main management requirements:
(1) Quality management system;
(2) Management responsibility;
(3) Resources management;
(4) Product realization; and
(5) Measurement, analysis, and improvement.
The ISO 9001:2000 standard integrates the three standards into one, which places emphasis
on process management and resource management and has commonality of architecture with
ISO 9004, so that quality assurance requirements and quality management can be aligned
holistically (Tsim et.al., 2002)
The management responsibility element comprises the requirements for developing and
improving the quality, system, listening to customers, formulating quality policy and
planning, and defining responsibilities, authorities and communication processes to facilitate
effective quality management.
The resource management element comprises the requirements for managing both human and
infrastructural resources in order to implement and improve the quality management system
and to address customer satisfaction.
The product realization element includes the specific requirements for the product realization
processes, which involve identifying customer requirements, reviewing product requirements,

3
communicating with customers, designing and developing products, purchasing, producing
(and/or delivering) services, and controlling measurement and monitoring devices.
The measurement, analysis and improvement element features the requirement for
monitoring information on customer satisfaction, measuring and monitoring products and
processes and managing internal audits, non-conformity detection and improvement actions.
ISO 9001:2000 uses the PDCA (Plan-Do-Act-Check) improvement circle to enclose the four
blocks of management responsibilities, resource management, process management,
measurement, analysis and improvement Ho (2002). The PDCA methodology can be applied
to all processes and can briefly be described as follows:
(1) Plan. Establish the objectives and processes necessary to deliver results in accordance
with customer requirements and the organization policies.
(2) Do. Implement the processes.
(3) Check. Monitor and measure processes and products against policies, objectives and
requirements for the product and report the results.
(4) Act. Take actions to continually improve process performance.

ISO 9000 and Its Implementation

ISO 9000 is a quality management system applicable to all types of organizations,
manufacturing and services. The standard emphasizes upon quality assurance in place of
traditional quality control. With a slow acceptance at the time of its introduction in 1987, ISO
9000 has been gaining popularity consistently. Increased international competition for
manufactured products has led to the worldwide adoption of quality systems standards and in
particular the ISO 9000 series. The development of certified quality systems as an approach
to quality improvement, particularly in relation to manufacturing product and process
consistency, has become a key component of the quality manager's ``toolkit''.
Since the publication in 1987, ISO 9000 has been perceived and adopted as an important
initial stage in a manufacturing organization’s development towards `total quality' and the
benefits of achieving ISO 9000 certification in terms of both a reduction in manufacturing
costs and an increase in market share have been well documented (LRQA, 1991, Quazi and
Padibjo, 1998).
The International Standards Organization (ISO) was founded in Europe in 1947. Its purpose
was to facilitate worldwide trade through the development of international quality standards
for products and services. Among the activities of this organization--and perhaps the most

4
influential and far-reaching--was the issuance of the 1987 bulletin that devised "a series of
international standards dealing with quality systems that can be used for external quality
assurance purposes." The standards provided companies with a series of guidelines on how to
establish systems for managing quality products and services. Businesses were given
standards to use to document practices that affected the quality of their offerings.
They could then follow ISO guidelines to become certified. The ISO 9000 series is a set of
international management standards designed to govern quality assurance and was developed
in 1987 by the International
Organization for Standardization, based in Geneva, Switzerland. ISO 9000 provides a
framework for a systematic approach to process management. It requires a detailed account
of procedures and operations, including documentation of how a company designs, produces,
inspects, packages and ships its products. With ISO 9000 the focus is on management
processes that affect quality (Stein & Hitchcock, 1997).
An important difference compared with earlier quality standards lies in the fact that ISO is
focused on quality control systems in general, ``from the process of product design to process
design and from production process through to service after-sale'' (Motwani et.al., 1996).
Furthermore, ISO is based on the notion that specific minimum characteristics of quality
systems can be standardized, which can give mutual benefits for organizations and their
suppliers because each of them knows that they both meet certain requirements concerning
quality systems (Tummala & Tang, 1996). It must be clear that ISO certification is not a
standardized package that can be applied in the same way in every organization. ``The
standards only recommend the essential elements of a proper quality assurance system,
without recommending the ways to apply them (Tsiotras & Gotzamani, 1996)''. Each
organization can design its own system that fits its specific needs and that fits the general
requirements of the ISO standards.
A “quality system” consists of a set of fixed business procedures and rules aiming to ensure
that a product, process or service meets a pre-determined and widely acknowledged set of
standards (Vloeberghs & Bellens, 1996). Quality assurance, an industrial process designed to
manage and update the quality system, is able to continuously guarantee and demonstrate that
the system conforms to the agreed set of specific conditions and standards (Rothery, 1992).
The ISO 9000 series or, more formally, “quality management and quality assurance
standards,” outlines the requirements to be met by a producer, illustrating the producer’s

5
competence to design, produce and deliver products or services with a consistent and
coherent level of quality.

NEED OF STUDY
The studies show that the principal reasons of the organisations opting for ISO 9000 are
customer pressure, entering into export markets and image of the organization. However
internal Improvements are not the significant objectives. As a result, the expected benefits of
the ISO 9000 are not apparent even after certification.
A successful implementation of a quality system may generate, on the one hand, a
differentiation, and on the other hand, low costs (Belohlav, 1993; Grant, 1995). In this
respect, the adoption of ISO 9000 has been justified in terms of the many internal and
external benefits it can generate (Brown et.al., 1998; Lee, 1998; Quazi and Padibjo, 1998;
Casadesu´s & Heras, 2001; Singels et.al., 2001; Yahya and Goh, 2001), although problems
may also arise (Brown et.al., 1998; Joubert, 1998; Kanji, 1998; Quazi & Padibjo, 1998;
Singels et.al., 2001; Yahya & Goh, 2001).
Nevertheless, with a correct application of the standard the advantages will doubtless
outweigh the disadvantages.
The process of implementing ISO 9000 is a change process, which requires attitudinal change
at all levels in the organizations. However each change is associated with the resistance in
various forms and also other types of problems.
The effective implementation of ISO 9000 requires the acceptance of change of all levels. In
the absence of this acceptance, the implementation process becomes eyewash and the
organizations fail to reap the performance benefits of ISO 9000. As a result, the expectations
of the management in implementing ISO 9000 are not met.
The successful implementation of ISO 9000 requires handling of problems encountered in a
manner to ensure smooth transition.
Another issue related to the implementation of ISO 9000 quality management system is the
sustainability of the improvement in performance over a period of time. The improvements
are sustainable only if the developed and adopted systems are followed consistently and are
not discontinued after the certification. The certification bodies, in their surveillance audits,
have observed that, in many cases the level of implementation has significantly fallen after
certification.

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Studies show that ISO 9000 quality management system has a significant impact on the
performance of organizations. The basic performance indicators, as per the studies are
customer satisfaction, improvement in quality and effective cost control.
The studies also show that the process of implementing ISO 9000 quality management
systems is not without problems and obstacles.
The present study aims at the understanding the expected benefits of implementing ISO 9000
quality management system with respect to improvement in performance and also to study
the problems associated with implementing ISO 9000 quality management system with
specific reference to electric switch manufacturing industry.

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 CHAPTER 2
RESEARCH
METHODOLOGY

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 CHAPTER 2
RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY.

The present study is conducted to accomplish the following objectives:-
1. To identify the motives of the management for implementing ISO 9000 in the
organization
2. To identify the problems associated with the implementation of ISO 9000 in the
electric switch industry.
3. To identify the impacts of ISO 9000 implementation on the performance measures
4. To study the satisfaction of management as a result of ISO 9000 implementation in
the electric switch industry
5. To compare the implementation of ISO 9000 in large and small organisations

HYPOTHESES

Hypothesis 1 :
H1o: There is no correlation between the motivations of the management for implementing
ISO 9000 and the satisfaction derived out of it.
H1a: There is a correlation between the motivations of the management for implementing
ISO 9000 and the satisfaction derived out of it

METHODOLOGY

Research Type
Kind of research depends upon nature of data. On the basis of nature of data, the research is
Quantitative, as findings of study are based on quantified measures.

Research Design
The present study is Descriptive, which describe phenomena as they exist; it identifies &
obtains information on the characteristics of a particular problem or issue. It describes what is
happening via understanding & analyzing related to ISO implementation.

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Universe of the Study
Electric Switch manufacturing companies of Mumbai.

REASEARCH SAMPLING

Sample Unit
The present study was based upon the implementation of quality management systems and its
impact on select performance measures in the electric switches manufacturing organizations.
Hence the sampling frame for the study was the electric switches manufacturing units which
have implemented ISO 9000 quality management systems at least one year prior to study.
Only those units which had achieved ISO 9000 at least one year prior to study were
considered so that the satisfaction derived from implementation can be studied.
Sampling Technique
Purposive (a non-random sampling method) has been used.

Sample Size –
The chief executive officers of the sampling unit were the targeted respondents.
Studied 10 Organisation

Area of Study
The present study is based on the information obtained through a survey process in electric
switches manufacturing organizations of Mumbai City.

Data Collection Method

Primary Data –
Survey methods by mode of administration can be classified into three categories
· Telephone interview
· Personal interview
· Mail interview

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Telephone Interviews have the advantage of flexibility of data collection, better sample
control, moderate response rate, effective in obtaining sensitive data, speed and moderate
cost. However they have the drawback of low question diversity and low quantity of data.
Personal Interviews offer many advantages as compared to telephonic or mail survey. They
have the advantage of high flexibility of data collection, high diversity of questions, high
sample control, high quantity of data and high response rate. However the personal
interviews suffer from a number of drawbacks also like high cost and high potential for
interviewer bias.
Mail Surveys offer low flexibility of data collection, low sample control, low response rate
but the mail interviews offer the advantages of low cost, higher speed and low potential for
interviewer bias The large geographical spread necessitated the adoption of mail survey
technique. The mail survey technique was chosen so that the organisations in different parts
of the country could be included in the study. The technique has the advantage that a large
number of sampling units can be covered in the study. However, the mail survey technique
has the drawback of low rate of response.

Secondary data – Secondary data have been collected as per availability through various
websites of electric switches manufacturing unit. And literature collected through various
published articles.

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 CHAPTER 4
DATA ANALYSIS AND
INTERPRETATION

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 CHAPTER 4
DATA ANALYSIS AND INTERPRETATION

MOTIVATIONS FOR IMPLEMENTING ISO 9000

6 motivations were identified on the basis of initial survey. The responses of the respondents
on the motives identified are summarized as follows.
Motive Yes No
Growth in sales 9 (90%) 1(10%)
Better product quality 8 (80%) 2(20%)
Better process control 9 (90%) 1(10%)
Better MIS 3 (30%) 7(70%)
Better employee satisfaction 2 (20%) 8(80%)
Competitiveness 9 (90%) 1(10%)

The study revealed that the major motivation for implementing ISO 9000 was growth in
sales. 90% respondents out of 10 responded yes to this motive. The factors better product
quality, better process control and competitiveness were also other major motivations with
80%, 90% and 90% respondents respectively responding yes. However better MIS and better
employee satisfaction were responded yes by only 30% and 20% respondents respectively
indicating that they are not the major motivations for implementing ISO 9000.
The motivators for implementing ISO 9000 can be classified in two categories – internal and
external. The internal motivators refer to the factors that have an impact on the in house
improvement like better employee morale and satisfaction, better management information
systems and better process control. These internal motivators make the organisation more
efficient in operations.
The external motivators are on the other hand are those which are related to higher
profitability and are directly linked to the customers. These motivators include growth in
sales, better product quality and competitiveness. The external factors indicate all those
factors which are directly related to the monetary gains.
It is evident from the data that the management of the electric switch manufacturing
organisations has been motivated by the external factors much more than the internal factors.
ISO 9000 implementation involves a heavy investment including cost of training,
implementation and certification. For the top management every investment is evaluated on

13
the basis of return on investment. That is the reason of giving more importance to external
factors over the internal factors for deciding to implement ISO 9000 in the organisations.
The motivating factors in the small organisations are generally financial returns whereas in
case of large organisations the motivating factors apart from financial returns are also the
improvement in product quality and change in culture of the organization.

PROBLEMS FACED IN IMPLEMENTING ISO 9000

The survey identifies six problems faced by the management in implementing ISO 9000. The
study was carried out to identify the extent of these problems faced by electric switch
manufacturing companies. The scale of 1 to 5 was used with 1 indicating negligible and 5
indicating very high. The summary of data obtained is as follows.

Sr. No. 1 2 3 4 5
1 Lack of competent people 20% 80%
2 High documentation 20% 80%
3 Keeping too many records 100%
4 Employee resistance 50% 20% 30%
5 Complicated requirements of ISO 9000 10% 20% 70%
6 Inability to integrate ISO 9000 with 10% 90%
operations

The results reveal that requirement of too many records was found as a major problem with
100% of respondents rating it 5. High documentation, complicated standard requirements and
inability to integrate ISO 9000 with operations were also the problems faced by majority of
respondents, with 80%, 70% and 90% respondents respectively rating these problems as 5 on
a scale of 1 to 5. However lack of competent people and employee resistance were not found
to be the major problems with none of the respondents rating it above 3. Lack of competent
personnel has not been stated as a major problem in the survey.
The management tends to seek the services of a consultant for implementing ISO 9000. The
consultants are responsible for interpreting the requirements of the standard into the language
of the organisation. The job of the employees is restricted to following the guidelines of the
consultant. For any clarification or help, the consultant is available. Even if the employees are
not much educated and competent to develop the quality management system, with the help

14
of the consultant, they are able to implement the system. So lack of competent employees has
not been rated as a major problem in implementing ISO 9000 by the organisations.
Another problem identified is high documentation. ISO 9000 is a formal quality management
system which requires documentation of practices in all areas of the organisation. The
documentation includes standard operating procedures, quality manual, work instructions and
reference documents. Once the documents are prepared, they need to be followed and any
deviation from the documents is recorded as a non conformity. Documentation of all the
procedures is a time taking activity, which requires in depth knowledge of the operations and
needs to be reviewed a number of times before freezing. The electric switch industry
personnel are competent in their operations by experience, but they are not comfortable in
documentation. This problem has surfaced as one of the major problems in implementing ISO
9000 in the electric switch manufacturing industry.
ISO 9000 quality management system is an auditable system. The audits are based upon the
records. As such, records in defined formats need to be maintained for each activity. This has
been rated as a major problem in the survey. The electric switch manufacturing industry
specially the export oriented industry is highly suppressed for lead time. Electric switch being
a fashion product, adherence to lead time is essential for this industry. Keeping record of all
activities like production, training, rejection, rework, productivity, non conforming product
etc. is seen as deterrent in efficiency.
There is a general feeling that the maintenance of so many records makes every employee
concerned about the correct recording rather than concentrating on the basic activity. Apart
from these operational records, some records like internal audit records, management review
records, record of corrective and preventive actions, and record of calibration and validation
of the equipment also need to be maintained which are entirely new for the industry and are
not directly linked to the manufacturing process.
Employee resistance is another problem identified by the study. ISO 9000 being a change
process faces initial employee resistance. Implementation of ISO 9000 requires the
maintenance of records which is seen as a deterrent to efficiency by the employees. The
employees also resist the practice of internal audits which makes them answerable to even the
junior employees of the organisation. However under the pressure of the management, the
employees are forced to adopt the implementation and hence employee resistance is not seen
by the management as one of the major problems.

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Complicated requirements of the ISO 9000 standard has also been identified as one of the
problems in implementing ISO 9000. The standard being product neutral, the elements of the
standard are generic in nature and need to be translated as per the requirements of the
operations of specific industry. Most of the requirements of the standard are quality
management relate requirements like responsibility & authority, functional objectives,
management review, data analysis, measurement of customer satisfaction, internal audit,
corrective actions, preventive actions etc. these requirements are new to management and
employees and hence the management finds these requirements of the standard complicated
to implement. Another problem identified during the survey is inability to integrate ISO 9000
system with operations. Due to requirements of high levels of documentation and records,
ISO 9000 becomes a formality to be shown to external auditors. The employees and
management tend to maintain the records for the sake of audits and not for benefit.
Difference between the documented procedures and actual practice further adds to the
problem. ISO 9000 assumes only an ornamental value due to these reasons and is seen as a
separate entity from the routine work. Since some of the problems were of similar nature,
factor analysis was carried out to verify whether there were any hidden constructs in these
problems. The results of the factor analysis are reproduced below.

FACTOR ANALYSIS FOR PROBLEMS FACED IN IMPLEMENTING ISO 9000

Factor analysis was carried out to identify any hidden constructs in the problems relating to
implementation of ISO 9000. The results of factor analysis are presented below
Factor analysis led to identification of four factors.
1. Factor 1 is related to employee resistance and lack of competent personnel and can be
termed as human resource related problems.
2. Factor 2 is related to need of too many records
3. Factor 3 is related to complicated requirements of ISO 9000 standard
4. Factor 4 is related to inability to integrate ISO 9000 with the operations

CORRELATION BETWEEN PROBLEMS AND SATISFACTION

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Correlation analysis was carried out to verify whether the problems faced during
implementation of ISO 9000 are also related to the satisfaction derived out of implementing
ISO 9000.
The results of correlation analysis are reproduced below

Parameter Pearson correlation Significance

Factor 1 .005 .965
Factor 2 .259 .022
Factor 3 -.026 .824
Factor 4 .004 .969

The value of p is greater than 0.10 in case of factor1, 3 and 4, so the correlation can be
concluded to be not significant. However in case of factor 2, the value of p is less than 0.10
so the correlation is significant. The factor 2 is formal system requirements, is a part of
implementation of ISO 9000. However, high levels of documentation and higher need to
maintain records shift the focus from core activity to formalities. Higher the bulk of
documentation and records, lower will be the satisfaction derived from implementing ISO
9000.
Factor 1 is human resource related problems. However these problems are in the initial
phases of implementation only and over a period of time the employees learn to work with
the formal system. So the initial change related problems do not impact the overall
satisfaction derived from ISO 9000.
Factor 3, complicated requirements of the standard also, is of temporary nature. Over a period
of time the documented system comes into practice and the concentration is on following the
documented system rather than trying to interpret the requirements of the standard. So its
impact on overall satisfaction from ISO 9000 is not significant.
Factor 4 is inability to integrate the ISO 9000 requirements with operations. The motive of
management in implementing ISO 9000 quality management system is mainly external i.e.
business oriented. Since the implementation of ISO 9000 results into external benefits like
increased sales, this factor does not contribute much to the overall satisfaction derived from
implementing ISO 9000.

IMPACT OF ISO 9000 IMPLEMENTATION ON PERFORMANCE MEASURES

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The initial survey revealed 11 performance measures of the electric switch manufacturing
units which were affected by implementing ISO 9000. Study was carried out to identify the
significance of these performance measures in the electric switch manufacturing units. The
results obtained are reproduced below
S Performance measure 1 2 3 4 5 6 7 8 9 10
PERCENTAGE
1 Sales turnover 100
2 Volume of Complaints 100
3 Late shipments 100
4 Costing 30 70
5 Rejection 30 30 40
6 Rework 30 30 40
7 Employee turnover 10 70 20
8 Excess purchase 20 40 40
9 Machine down time 60 20 20
10 Absenteeism 20 50 20 10
11 Productivity 100

The performance measures of the organisation can be classified as business performance

measures and process performance measures.
Business Performance Measures
The performance measures including sales turnover, volume of complaints, costing accuracy
and late shipments are directly related to business performance. Hence they can be classified
as business performance measures. 100 % of respondents have assigned a rating of 10 to
these performance measures except accuracy of costing which has been rated 10 by 70%
respondents, indicating again that the principal motive of adopting ISO 9000 quality
management system is business performance.
Process Performance Measures
Process performance measures are all those factors which have an impact on the operational
efficiency and organisational culture. The process performance measures identified in this
study are rejection, rework, employee turnover, excess purchase, machine downtime,
absenteeism and productivity. Employee absenteeism and employee turnover have not been
considered as highly significant by the respondents while rejection, rework, excess purchase,
machine downtime and productivity have been considered moderately significant.

18
The impact on these performance measures was studied on a scale of 1 to 5 with 1 indicating
negligible and 5 indicating very high. The summary of results obtaine3d is as follows.
The study reveals that impact of ISO 9000 was not perceived as very high on the performance
measures with very few responses rated as 5. The impact on employee turnover and
absenteeism was found to be negligible by 100% of the respondents.
However 45 respondents found the impact on late shipments to be moderate with a rating of
3. Similarly 50% respondents found the impact on rejection and rework rate to be moderate
with a rating of 3.

S Performance measure 1 2 3 4 5
PERCENTAGE
1 Sales turnover 40 40 10
2 Volume of Complaints 20 30 40 10
3 Late shipments 30 20 50
4 Costing 80 20
5 Rejection 20 30 40 10
6 Rework 20 30 40 10
7 Employee turnover 100
8 Excess purchase 90 10
9 Machine down time 30 20 40 10
10 Absenteeism 100
11 Productivity 10 30 30 30

The impact on sales turnover was found to be negligible by the respondents. ISO 9000 has
been considered as a marketing tool by the organisations and as such the emphasis is on
getting a certificate rather than true implementation of the system. Soothe impact on quality
and customer service is not as high as expected from ISO 9000. Over a period of time, this
has been understood by the customers also and the customers are now relying upon their own
assessment of quality and service rather than influenced by the certificate of ISO 9000
Impact on volume of complaints is rated as moderate by the respondents. The impact on the
volume of complaints is the result of formal system of customer complaint handling required
by ISO 9000 standard. The formal system creates awareness about seeking customer
feedback on the quality and taking corrective measures. Also a formal system of quality
inspection at all stages of production has been introduced by the standard. In process

19
inspection helps in identifying the quality problems before the goods are dispatched to the
customers and results in lower volume of customer complaints.
Impact on late shipments has been found to be moderate with 60% of respondents rating the
impact as 3. This impact is because of the introduction of planning in the product realization
element of ISO 9000 standard. Time and schedule planning has helped in meeting the
shipment deadlines and reducing the late shipments. Contract review, another essential
element of ISO 9000 also ensures that capability to produce in a specific time is assessed
before the customer’s order is accepted.
Impact of ISO 9000 implementation on costing has been found to be low by the respondents.
Since the costing is a parameter related to business performance, it was done with due care
even before implementing ISO 9000. Further the costing depends upon external factors like
cost of raw materials and as such cannot be reduced by introducing the quality management
system. However, ISO 9000 made the costing a formal recorded activity.
Rejection and rework have been considered as moderately affected by implementing ISO
9000, with 40% respondents rating the impact as 3. Rejection and rework are the result of
poor workmanship. ISO 9000 system has introduced in process quality inspection at all stages
of production from raw material to finished product. The in process quality inspection helps
in identifying the quality problems at their origin and immediate correction. As a result, the
probability of a defective product being processed further is reduced. It has resulted in
reduction of rejection and rework in the process.
Employee turnover is another important performance measure of the organisation. However
the impact of ISO 9000 on employee turnover has been found to be negligible. Discussion
reveals that ISO 9000 implementation is not able to improve the work environment of the
organisation. In fact it makes the employees more accountable. Hence ISO 9000 has been
unable to retain the employees in the organisation.
The impact of ISO 9000 implementation on excess purchase of materials was also found to
be low. Excess purchase of raw materials is done in anticipation of the rejection and rework
of the product. Also since bulk purchase offers quantity discounts also, the practice is
followed in the industry. Although ISO 9000 requires the purchase of raw materials to be
controlled, it does not restrict the organizations from purchasing more than requirements.

Machine downtime has been considered to be significantly affected by implementing ISO

9000 quality management system. 10% of respondents have rated the impact as 5 and 40% as

20
4. High impact on machine downtime is a result of formal system of preventive maintenance
of resources, introduced by ISO 9000.
Lower machine downtime has also resulted in lower customer complaints and less late
shipments.
Employee absenteeism is another important performance measure of the organisation.
However the impact of ISO 9000 on employee absenteeism has been found to be negligible.
Discussion reveals that ISO 9000 implementation is not able to improve the work
environment of the organisation. In fact it makes the employees more accountable. Hence
ISO 9000 has been unable to motivate the employees in the organisation.
The impact of ISO 9000 on productivity was found to be moderate by the respondents. The
productivity has been assessed to be better because of better preventive maintenance of
machines, better production planning, system of records and the introduction of in process
quality inspection.
Since there was large number of performance measures and of similar nature, factor analysis
was carried out to verify whether these measures can be grouped. The results of factor
analysis are as follows

FACTOR ANALYSIS FOR IMPACT ON PERFORMANCE MEASURES

The analysis has determined 4 factors relating to the performance measures.
1. Factor 1 is related to impact on sales, complaints, late shipments, rejection, rework,
machine breakdown and productivity. In general it can be called as impact on
business process control
2. Factor 2 is related to impact on cost of production
3. Factor 3 is related to impact on employee absenteeism and can be generalized as
impact on employee control.
4. Factor 4 is related to impact on employee turnover and can be generalized as impact
on employee motivation

CORRELATION BETWEEN IMPACT ON PERFORMANCE MEASURES AND

SATISAFCTION
Correlation analysis was carried out to study whether the impact on performance measures is
related to the management satisfaction derived from implementing ISO 9000 and if yes to
what extent. The results of correlation analysis are as follows.

21
 Parameter Pearson correlation Significance
Factor 1 .844 .000
Factor 2 .247 .029
Factor 3 -.030 .794
Factor 4 .097 .400

The value of p is smaller than 0.10 in case of factor 1 and 2, so the correlation between factor
1 and 2 and satisfaction can be concluded to be significant. However the value of p is greater
than 0.10, in case of factor 3 and 4. So correlation between factor 3, 4 and satisfaction as a
result of implementing ISO 9000 is not significant.
Factor 1 is business process control which is directly related to the profitability of the
organisation. As is evident from the motivations for implementing ISO 9000 also, the
management principally adopts the quality management system as a marketing tool. As such
impact on business performance measures leads to higher management satisfaction from
implementing ISO 9000.
Factor 2 is again related to production cost which has financial implications for the
management. The cost has an impact on the profitability of the organisation. Therefore lower
cost of production leads to higher management satisfaction by implementing quality
management system.
Factor 3 and 4 are related to employee control and employee motivation. These factors have
an impact on the work culture of the organisation. The work culture although important for
the business performance and cost of production, does not directly affect the profitability or
business volume of the organisation. As such these factors are not correlated to management
satisfaction by implementing quality management systems.

MANAGEMANT SATISFACTION AS A RESULT OF IMPLEMETING ISO 9000

The satisfaction of management as result of implementing ISO 9000 was studied on a scale 1
to 6, 1 indicating negligible and 6 indicating very high. The results obtained are reproduced
below.

22
Scale value Percent
1 10
2 00
3 10
4 50
5 20
6 10

The results indicate that majority of managements were moderately satisfied by

implementing ISO 9000 with 50% of respondents rating the overall satisfaction at 4. 10%
respondents were found to be highly satisfied with a rating of 6. However 10% respondents
were not found to be satisfied with the implementation and effectiveness of ISO 9000.
This is because of the reason that motive of management in implementing ISO 9000 quality
management system was improvement in business by means of increased sale volume, lower
late shipments and reduced customer complaints. However the data of impacts on
performance measures indicates that impact of quality management system implementation
on business performance has been marginal.
Also the problems faced during and after implementation of ISO 9000, reduce the
management satisfaction from quality management systems.
Correlation analysis was carried out to study the relation between motivations and the
satisfaction derived out of implementing ISO 9000. The results are reproduced below.

CORRELATION BETWEEN MOTIVATIONS FOR IMPLEMENTING ISO 9000

AND SATISFACTION FROM IMPLEMENTATION
Correlation analysis was carried out to study whether there is any relation between the
motivations for adopting ISO 9000 and management satisfaction resulting from implementing
ISO 9000

Parameter Pearson correlation Significance

Impact on customer satisfaction .679 .000
Impact on cost .232 .041
Impact on quality .681 .000

23
 Impact on motivation .218 .056
Impact on process control .669 .000

the value of p for all the pairs is less than 0.10, so it can be concluded that the correlation
between the motives for implementing ISO 9000 and satisfaction derived from implementing
ISO 9000 is significant. However, the value of p is less than 0.10 in case of employee
motivation. So the motive of employee motivation does not have significant correlation with
the management satisfaction.

24
 CHAPTER 5
FINDINGS

CHAPTER 5
FINDINGS

MOTIVATIONS FOR IMPLEMENTING ISO 9000

25
Literature shows that organisations have a number of reasons for seeking registration to the
standards. Many organisations, particularly in the early stages of the history of ISO 9000,
registered for marketing-related reasons (Taylor, 1995a,b). Some of these organisations
unscrupulously used the standards to suggest higher product quality, taking advantage of the
high level of public ignorance of the standards. Other organisations have used the standards
as a part of broader differentiation strategy (Anderson et.al., 1999; Naveh et.al., 2004). As
first movers in up-taking this innovation, these organisations have used the standards as a
relatively cost-effective signal to customers and regulators that they have quality
management systems in place. With the passage of time, there has a phenomenal growth in
the number of registrations and this has led to intensification of competition. This, in turn, has
led to coercive forces having strong influence on many organisations’ decisions to register.
Large customers, particularly governments and multi-national corporations, have made ISO
9000 mandatory for their suppliers (Brown and Wiele, 1995). As a result, many suppliers feel
compelled to register in order to get themselves onto supplier lists (Lee and Palmer, 1999;
Hughes et.al., 2000). ISO 9000 has become an “order-qualifier”, and not necessarily an
“order-winner” (Meegan and Taylor, 1997).
Finally, there are many organisations that register for more “enlightened motivations”
(Meegan and Taylor, 1997). This essentially involves using the standards for internally driven
genuine improvement of operations (Anderson and Sohal, 1999; Naveh and Marcus, 2004)
The management implements ISO 9000 with specific motives. The driving force for
implementing ISO 9000 quality management system can be internal or external.
Survey was conducted to identify the motivations for adopting ISO 9000 quality management
systems in the electric switch manufacturing industry. The results indicate that major factors
that motivate the electric switch manufacturing companies to adopt ISO 9000 were found to
be growth in sales, better quality of products, better process control, better MIS, higher
employee satisfaction and competitiveness.
Growth in sales was found to be the major motive in implementing ISO 9000 with 90% of
resondents stating growth in sales to be their motivation behind adopting ISO 9000. 80% of
respondents stated improvement in product quality to be an objective of implementing the
quality management systems. Better process control was also identified as one of the major
motivations for implementing ISO 9000 with 90% respondents accepting it as the motive.
Competitiveness was also observed to be one of the major motives for implementing quality

26
management systems with 90% of respondents accepting it as their motive for implementing
ISO 9000.
However better MIS and better employee satisfaction were not significant motives with 30%
and 20% positive responses only.
This is in contradiction to the studies by Erel & Ghosh (1997) and Raynor & Porter (1991)
who suggested that customer pressure is the main motivational force behind adopting ISO
9000. However they also found that internal benefits such as better internal control (based on
improved transparency of processes and waste avoidance resulting from certification) and
other motivating factors an opportunity to implement a quality system, a step towards TQM,
improved quality of production, enhanced customer satisfaction, a means of getting the
quality system certified, increased exports, a competitive necessity, increased market share,
and demands by customers are in line with the results of this study According to Lee (1996),
establishment of internal quality assurance systems, quality improvement/productivity
increase, customer demand, strengthening of external image (publicity) and competition
consideration were the motives for pursuing ISO 9000 which again matches with the findings
of this study.
The results of this study are also in line with the findings of Haversjo (2000) who states that
increased profitability seems to be a primary motive for managers going for ISO 9000
registration, more stable production, lower total costs of production and image improvements
are among the other reasons to go for ISO 9000.
The study of Tang & Kam (1999) also corroborates the present study who identified
motivation for seeking ISO 9001 certification as to improve the firm’s quality image in the
construction industry, to improve the firm’s efficiency and management, to improve the
internal and external communication, to resolve the quality problem arising from poor design
work, to reduce liability risks and insurance cost, to meet the internal policy requirement
from the parent company, the mandate from the Government, the demands from the private
developers and as a start for total quality management (TQM).
Another study that supports the present study is a study by Carlsson et.al. (1996) who stated
reasons for certification as a step towards total quality, international market/customer
demands, competition, create better internal routines and procedures, product quality,
domestic market/customer demand, development tool for the operation, profitability,
group/management directive, reducing quality deficiency costs, increased rapidity,
organizational reasons and legal requirement.

27
The results of the present study are in contradiction to the study of (Tsiotras & Gotzamani,
1997) who stated that the improvement of competitiveness was a less important factor
although market-related reasons have been reported to be the dominating factor for deciding
the implementation
T test was conducted to verify any difference in motivations for implementing ISO 9000 in
large and small companies. The difference between the two was found to be significant. The
motivating factors in the small organisations are generally financial returns whereas in case
of large organisations the motivating factors apart from financial returns are also the
improvement in product quality and change in culture of the organisation.
So it can be concluded that the management of electric switch manufacturing units are
motivated by external and internal factors for implementing ISO 9000. However the
motivating factors are mostly external in case of small organisations and a mix of external
and internal factors in case of large organisations.
PROBLEMS ASSOCIATED WITH IMPLEMENTATION OF ISO 9000
Implementation of ISO 9000 is not free from problems. In fact these problems are one of the
major prohibiting factors for the organisations to adopt ISO 9000. The present study
attempted to identify the various problems associated with the implementation of quality
management system.
Lack of strong senior management involvement, resistance or bad attitude from the staff,
engineers are trained to look for quality and are often not convinced that ISO 9001 is the best
way to do so. In an absence of well structured quality system and procedures, lack of
effective communication even under quality procedures requirements, too much
documentation and record, impractical ISO 9001 requirements on consultancy services, not
fully understanding the requirements of ISO 9001 by the staff, change in culture, insufficient
quality training to staff, no cooperation from the client to meet your procedures under project
quality plan and aim at maintaining the ISO 9001 certification as a ‘Work Permit’ but not
seeking for further quality improvement, were the difficulties in implementing ISO 9001.
Tang & Kam (1999).

The main problems identified by the study are

· Lack of competent personnel
· High volume of documentation
· Need of too many records

28
· Employee resistance
· Too complicated requirements
· Inability to integrate ISO 9000 with operations
· Lack of competent personnel
The results reveal that requirement of too many records was found as a major problem with
100% of respondents rating it 5. High documentation, complicated standard requirements and
inability to integrate ISO 9000 with operations were also the problems faced by majority of
respondents, with 80%, 70% and 90% respondents respectively rating these problems as 5 on
a scale of 1 to 5. However lack of competent people and employee resistance were not found
to be the major problems with none of the respondents rating it above 3. Lack of competent
personnel has not been stated as a major problem in the survey. Employee resistance on the
same line was rated 3 or less by 100% of the respondents.
Factor analysis was carried out on the identified problems and the factors could be reduced to
four.
The extracted factors were
· Human Resource Related Problems
· Formal System Requirements
· Complicated Requirements of ISO 9000 Standard
· Inability to Integrate ISO 9000 With The Operations

RELATIONSHIP BETWEEN SATISFACTION AND PROBLEMS FACED DURING

IMPLEMENTATION OF ISO 9000
The correlation between satisfaction and problems faced during implementation does not give
evidence of their relation. The management satisfaction is dependent upon the realization of
the benefits of ISO 9000 and not on how they were achieved.
However the management has a perception that the requirements of ISO 9000 standard are
complicated. Since the certifications are followed by the surveillance audits, it is important to
maintain the established systems. So it has been observed that even after achieving ISO 9000
certifications, the management remains dissatisfied due to complex requirements of the
standard. This corroborated by a high value of correlation coefficient between satisfaction
and complicated requirements of the standard. However for other problems of
implementation, they have little impact on the management satisfaction.

29
Since the problems were observed to be of similar nature, factor analysis was carried out to
identify any hidden constructs. The problems associated with the implementation of ISO
9000 on the basis of factor analysis were identified as
· Human resource related problems
· Need of too many records
· Complicated requirements of ISO 9000 standard
· Inability to integrate ISO 9000 with the operations

ORGANISATIONAL PERFORMANCE MEASURES AND THEIR SIGNIFICANCE

The authors have reported that the businesses that were gaining most from TQM
implementation had started with ISO 9000 and focused on both external (e.g. customer
satisfaction, etc.) as well as internal measures (scrap, efficiency, etc.)
McAdam and McKeown (1999). The results of an extensive study by Terziovski et.al. (1996)
of 1,341 manufacturing sites were contradictory. They concluded that the presence or absence
of ISO 9000 certification is a poor indicator of organizational performance and quality as
measured with respect to defect rates, warranty costs, and other key measures such as full on-
time delivery. Batchelor (1992) supports this view by providing empirical evidence showing
that only 15 percent of the 647 certified manufacturing and service organizations had derived
business value on nine dimensions of organizational performance. These dimensions were
market share, new customers, customer satisfaction, procedural efficiency, staff motivation,
staff attitudes, error rates, wastage, and costs. Another extensive study by Samson &
Terziovski (1999) indicated that behavioral factors such as executive commitment, employee
empowerment, and an open culture are capable of producing competitive advantages more
strongly than TQM tools and techniques such as process improvement, benchmarking, and
information and analysis.
Study was carried out to understand the significance of these performance measures in the
electric switch manufacturing companies.
The various performance measures in the electric switch industry on the basis of study and
literature survey have been identified as
· Sales Turnover
· Volume of Complaints
· Late Shipments
· Costing verses Actual Cost

30
· Rejection%
· Rework%
· Employee Turnover Rate
· Excess Purchase
· Machine Breakdown Rate
· Absenteeism
· Productivity
The results indicate that sales turnover, customer complaints, late shipments and productivity
were the most significant performance measures with 100% of respondents rating these as
highest on the scale. Cost of production, rejection and rework were also identified as
significant performance measures with 70%, 40% and 40% respondents respectively
responding the significance of these performance measures as the highest on the scale.
Employee turnover, excess purchase, machine downtime and absenteeism were found to be
moderately significant.

IMPACT OF ISO 9000

The present study attempted to investigate in to the performance measures of the
organisations, affected by implementation of ISO 9000. the major performance measures
affected by implementing quality management system ware found to be sales turnover,
volume of complaints, late shipments, costing verses actual cost, rejection%, rework%,
employee turnover rate, excess purchase, machine breakdown rate, absenteeism and
productivity. It was observed that the impact on the performance measures was positive due
to implementing ISO 9000 quality management systems. The sales turnover was found to be
increased.
The impact was found to be highest on late shipments, volume of complaints, rejection and
rework with 50%, 50%, 50% and 50% of respondents rating the impact as 3 or more on a
scale of 1 to 5. 10% of the respondents rated impact on rejection and rework as 5. 10% of the
respondents rated impact on machine down time as 5, highest on the scale. 100% of the
respondents rated impact on absenteeism as 1 i.e. negligible.

MANAGEMENT SATISFACTION AS A RESULT OF IMPLEMENTING ISO 9000

QUALITY MANAGEMENT SYSTEMS

31
Research on the effects of adopting an ISO quality assurance scheme spans over a wide range
of business performance indicators and frequently the results are contradictory (Tsekouras
et.al., 2002; Dimara et.al., 2004). The early contributors (Deming, 1986; Juran, 1982;
Inshikawa, 1986) viewed quality management as a holistic management strategy aiming to
improve internal processes of companies and enhance the overall competitive performance
(Yahya & Goh, 2001). Evidence shows that ISO 9000 registration can be leveraged into a
competitive advantage when it ismade consistent with a firm’s strategic direction (Curkovic
& Pagell, 1999) and is related to expectations about its contribution to improved quality and
especially to those factors perceived by the management of the firm as important to
competitive success and competitive advantage (Escanciano et.al., 2001; Withers and
Ebrahimpour, 2000). For example, Forker et.al. (1996) examined a sample of strategic
business units and individual firms in the furniture industry and found that high quality leads
to improved business performance.
The results indicate that majority of managements were moderately satisfied by
implementing ISO 9000 with 50% of respondents rating the overall satisfaction at 4. 10%
respondents were found to be highly satisfied with a rating of 6. However 10% respondents
were not found to be satisfied with the implementation and effectiveness of ISO 9000.
This is because of the reason that motive of management in implementing ISO 9000 quality
management system was improvement in business by means of increased sale volume, lower
late shipments and reduced customer complaints. However the data of impacts on
performance measures indicates that impact of quality management system implementation
on business performance has been marginal.
Also the problems faced during and after implementation of ISO 9000, reduce the
management satisfaction from quality management systems..
The findings of the study are in conformance to the study by Magd et.al. (2003) who studied
the costs, benefits and the satisfaction level with ISO 9000 implementation in Saudi Arabian
firms. A survey of 140 ISO 9000 certified manufacturing companies was carried out. The
results suggested that manufacturing companies were satisfied with ISO 9000 as far as the
benefits gained from certification and its costs were concerned. They considered the benefits
of ISO 9000 certification to exceed the costs of attaining the standards, and believed that ISO
9000 contributed to organizational survival and success.

32
Relationship between Satisfaction Derived From ISO 9000 and Impact on Performance
Measures
The correlation between satisfaction and impact on sales, customer complaints, late
shipments, rejection rework excess purchase machine breakdown and productivity has been
found to be significant at 1% level of significance. The correlation between impact on cost
and satisfaction has not been found to be significant whereas the impact on productivity has
been constant, so the correlation could not be calculated.
The various objectives for adopting ISO 9000 quality management system were studied and
the objectives were found to be complying with the performance measures of the
organisation. The satisfaction from ISO 9000 implementation has been found to be dependent
upon the extent to which the impact on performance measures has been achieved. However
the satisfaction has been found to be more closely related to the external measures of
performance having a direct impact on the cost and revenue, rather than the internal measures
like employee turnover, machine break down etc.
The correlation between motivations for implementing ISO 9000 and satisfaction from ISO
9000 was not found to be significant. However the motivations and expectations from ISO
9000 quality management systems are different in case of large and small organisations.
Whereas the large organisations look for long term impacts of ISO 9000, the smaller
organisations which are generally proprietorship expect a fast return on investment. Also the
expectation of smaller organisation is financial in nature whereas the larger organisations
look for the change in organisational climate also. ISO 9000 implementation is the process of
cultural change which starts demonstrating effects after a reasonable period of time. As a
result the management of large organisations is more satisfied with the implementation of
ISO 9000 as compared to the management of small organisations.

33
 CHAPTER 6
RECOMMENDATIONS AND
SUGGESTIONS

RECOMMENDATIONS AND SUGGESTIONS

34
a. The study is based on the perception of ISO 9000 implementation from the top
management point of view. The perception of employees towards impact of ISO 9000
could be entirely different from that of management. The employees of the
organisation resist change in the working culture and may not like the adoption of ISO
9000 quality management standard. There is scope of carrying out this study on the
perception of other levels of employees also.

b. With the increasing importance of quality in the global scenario, a number of quality
management systems have emerged. TQM, QS 9000, ISO 9000 are some of the
available tools of quality management. All these systems have their own inherent
advantages and disadvantages. For example, ISO 9000 has the disadvantage of being
too formal in terms of documentation requirements. The study can also include the
comparison of the impact of ISO 9000 with that of other quality management tools
like TQM.

c. The study has been carried out on the perception of top management with respect to
impact of quality management system on performance measures. Only the ISO 9000
certified companies have been included in the study. There is possibility of carrying
out the study on the basis of continuous monitoring of the change in performance
measures of the organisations while the implementation of ISO 9000 is in process.

d. The study can be carried out on the objective data rather than the subjective
perceptions of the top management. The objective data can give a better picture of the
impact because of its objective nature.

e. ISO 9000 standard is a compilation of various elements. Each of these elements has
its own impact on the performance of the organisation. The present study has
evaluated the overall impact of ISO 9000 implementation on the performance. More
research is required to understand the impact of each element of ISO 9000 on the
different performance measures.

f. Although ISO 9000 has been gaining popularity in the industry, but in the recent past
it has started losing its luster. ISO 9000 has been used as a marketing tool rather than
a process and quality improvement tool. As a result the faith of customers on ISO

35
 9000 certification is going down. The study can also be carried out from the
customer’s point of view rather than the management’s point of view.

g. ISO 14000 is an environmental management system, which is highly aligned with

ISO 9000 requirements. The study can also be carried out on the impact of
implementing ISO 9000 and ISO 14000 simultaneously.

36
CHAPTER 7
CONCLUSION

37
 CHAPTER 6
CONCLUSION

The main objectives of adopting the quality management systems in the garment
manufacturing industry are reduced cost of operations, improved quality and better customer
satisfaction resulting in better market share.
The present study has tried to establish a relation between the motivations in implementing
ISO 9000 and management satisfaction as a result of implementation. The major impacts of
ISO 9000 implementation in the organisation are reduced operations cost, clearer work
methods, reduced complaints, reduced reprocessing and higher customer satisfaction.
The time taken in implementation plays a vital role in the impact of quality management
systems on the performance measures of the organisation. The impacts are apparent over a
long period of time rather than immediate as suggested by (Brecka, 1994) who emphasized
that implementation of ISO 9000 should be considered as a long time investment.
In general, the managements of the organisations have been satisfied with the implementation
of ISO 9000 and its impacts on the performance.
The study established the relation between the impact on performance measures and the
resulting management satisfaction. It was found that the major contribution to management
satisfaction was due to increased productivity followed by reduced late shipments and
reduction in customer complaints. The study established a numerical expression for the
relation between the management satisfaction and impact on performance measures by using
regression.
The implementation of ISO 9000 has been found to be associated with a number of problems
also. The main problems identified by this study were high level of documentation, lack of
awareness, employee resistance and inability to integrate ISO 9000 requirements with the
operations of the organisation. High cost of implementation has also been found to a factor
for the resistance to implementation
Lack of management commitment and non acceptability by the junior managers has also been
found to be one of the problems in implementation of ISO 9000.
The relationship between the problems faced and management’s satisfaction was also studied.
However no significant impact of problems encountered on the management’s satisfaction

38
was observed. The reason for this fact is that management satisfaction is derived from the
outcome of the process and not by the process itself.
Another aspect of the study was studying the implementation of ISO 9000 in large and small
organisations and analyze for the differences if any. The organizations were divided in to two
groups on the basis of turnover. The organisations having a turnover up o 5 crores was
categorized as small and those with turnover more than 5 crores were categorized as large.
The management’s satisfaction derived from implementing quality management system was
also studied in small and large organisations. Significant difference was observed in the
management satisfaction in large and small organisations. The reason for this fact is that
management of smaller organisations strives for short term benefits and measures the benefit
in monetary terms only, whereas the management of larger organisations strives for better
work culture and streamlined operations. The expectation of immediate return causes reduced
satisfaction for implementing the quality management system in smaller organisations

39
BIBILIOGRAPHY

40
 BIBILIOGRAPHY

Reference Books
 Operations and Production Management- By Shridhar Bhat
 Quality Management – By R Paneerselvam
Journals
 The Indian Journal of Operations Management
 The International Journal of Quality Council
Magazines
 Indian Market
Websites
 www.electricworld.com
 www.wikipedia.com

41