The Influence of ISO 9000 Certification on Process Compliance

Abstract

This article examines the influence of ISO 9000 certification on plant‐level process compliance, which arguably is its first‐order, targeted performance dimension. The empirical setting is the medical device manufacturing industry. Process compliance is measured through Food and Drug Administration inspections of manufacturing plants. We control for several observable factors that possibly affect process compliance by matching certified plants with non‐certified plants. Using longitudinal data, we find plants that obtained certification in the earlier diffusion period (early‐certified plants) tend to have significantly better process compliance than a matched, non‐certified control group of plants. The compliance difference between early‐certified plants and their matched control group is greater than the compliance difference between late‐certified plants and their matched control group. We also find deterioration in process compliance over time after certification. Because we capture longitudinally the first‐order effects of ISO 9000 on process compliance, this study provides a useful baseline for assessing causality in ISO 9000‐performance linkages. Also, we explain, in part, the inconsistencies observed in related ISO 9000 literature examining the performance effects of certification. Further, this research offers managerial insights on the dynamics of certification and process compliance with time, and highlights the need for continued vigilance post certification.

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