Abstract
Introduction
Methods
Results
Discussion and conclusions
References
Abstract:
Although the original purpose for quality management standards such as ISO 9000 was to facilitate international trade, their effectiveness is widely questioned recently. In the literature, it has been commonly argued that institutionalization of quality standards as time goes by is a major reason behind their ineffectiveness. We explored this issue by using recent data from stock-listed firms in China. Following previous studies in this area, we examined the impact of quality management standards on the cost-efficiency and sales performance of adopting firms from 2000 to 2014. We explored if such an impact is contingent on the level of institutionalization as evidenced by the time of certifications. We show that the time of quality certifications in China has a negative impact on the effectiveness of standards in improving costefficiency. However, we did not find a similar weakening impact on sales performance. Overall, we find evidence of the deteriorating effects of quality management certifications in more recent years.
Introduction
Supply chain transactions have become more complex and international than ever, making it increasingly difficult for buyers to observe and ensure quality sellers (Terlaak and King 2006). The International Organization for Standardization’s main objective is to provide a set of harmonized worldwide technical standards in order to facilitate international exchanges and promote global trade (Clougherty and Grajek 2014). In the early years, international standards like ISO 9000 had proven significant in acting as the determinants of international trade, indeed, more than that of national standards (Clougherty and Grajek 2014; Potoski and Prakash 2009). Specifically, the ISO 9000 Quality Assurance Standards were published by the Technical Committee (TC176) of the International Organization for Standardization in 1979 to provide universal quality management standards and to rectify information asymmetry issues in international trade. It has been proven that ISO 9000 can act as an effective driver to increase trade (Potoski and Prakash 2009; Terlaak and King 2006). However, in recent years many experts find that the effectiveness of quality management standards are deteriorating due to a process of institutionalization.