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Bilateral (HK):Are Quality Management Systems Effectively Adopted in China? A Longitudinal Analysis of ISO 9000 Adoption and Comparison with UK firms

Grant reference: RES-000-22-3638

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Impact Report details

RES-000-22-3638 - Bilateral (HK)
Are Quality Management Systems Effectively Adopted in China? A Longitudinal Analysis of ISO 9000 Adoption and Comparison with UK Firms
English

Primary contributor

Author Paul Humphreys

Impacts

Organisations are continuously searching for ways to improve their performance and gain a competitive advantage. The adoption of ISO 9000, a quality management standard, offers one approach that firms use to improve performance. Prior research of the relationship between ISO 9000 and performance shows mixed results, with some studies indicating a positive relationship with performance and others failing to find a relationship. It has been argued that part of the reason for this may be due to contingency or contextual factors. Hence, taking a one-size fits all approach to ISO 9000 adoption may not lead to optimal outcomes. Different organisations may need different approaches to managing quality. This study investigates the importance of contextual variables and their impact on the efficacy of ISO 9000 certification. Scholars have recognized the importance of contingency theory in Operations Management. Some researchers have started to develop a refined understanding of managing quality by drawing on contingency theory and have considered such contextual variables as firm size. Our work, using an event study methodology, extends previous research by looking in more depth at potential firm (i.e., labor productivity, labor intensity, and Research & Development intensity) and industry-level (i.e., industry efficiency, industry concentration, market growth, and industry ISO 9000 certification level) contextual factors that potentially impact on the efficacy of ISO 9000 certification. The research has therefore contributed to a better understanding of the influence of contextual issues on the adoption of quality standards. The findings should assist industry and policy makers in refining the approach to adopting quality strategies.

The findings from an initial survey indicate that to excel in the global market firms need to consider supplier development strategies that focus on quality. The following outputs have been achieved: Wiengarten, F., Humphreys, P. Cao, G., Fynes, B. and McKittrick, A. (2010), Collaborative supply chain practices and performance: exploring the key role of information quality, Supply Chain Management: An International Journal, Vol. 15, No. 6, pp. 463-473. (Emerald highly commended paper award) •Humphreys, P., Cadden, T., Wenli, L. and McHugh, M. (2011), An investigation into supplier development activities and their Influence on performance in the Chinese electronics industry, Production Planning & Control, Vol. 22 No. 2, pp.137-156.; •Wenli, L., Humphreys, P., Yeung, A. and Cheng, T. (2012), The impact of supplier development on buyer competitive advantage: a path analytic model, International Journal of Production Economics, Vol. 135, No. 1, pp. 353-366; •Yang Y, Humphreys P, McIvor R, Yang B. E-business service in the UK telecommunication industry. In: 18th International Annual EurOMA Conference. 2011, Cambridge University, UK. The aggregated results show that ISO 9000 is more critical in less technology-intensive firms, and particularly strong for early adopters. This provides support for the context-dependent proposition. We conclude that it is crucial for managers to assess to what extent ISO 9000 would benefit firm performance. The following outputs are under review: •Lo, C., Wiengarten, F., Humphreys, P., Yeung, A. and Cheng, T., The impact of contextual factors on the performance of ISO 9000 adopting firms, Journal of Operations Management; •Wiengarten, F. and Humphreys, P., Taking an innovative approach to quality practices, International Journal of Production Research; •Wiengarten, F. and Humphreys, P., Contextual factors and the success of quality management: Taking a global perspective on operations strategy, Decision Sciences.

The scientific output outlined has been achieved through a dissemination strategy involving seminars, workshops and peer-reviewed journal submissions. We first aimed to present our findings to academic colleagues at invited seminars in the UK, Europe the USA and at our own institutions, starting in the first year of the project (2009) and continuing on through to 2011. The purpose of these presentations has been to test out our preliminary ideas and get feedback from the academic community, as well as to put our findings into the public domain. The following impacts have been achieved: •Three journal articles published (Supply Chain Management: An International Journal, Production Planning and Control, International Journal of Production Economics); •Three articles in review (Journal of Operations Management, International Journal of Production Research, Decision Sciences); •Eight seminar presentations and one international conference. Internationally, the research work was presented at a series of workshops/seminars, including: ESADE Business School, Spain; European Business School (Germany); Schulich Business School (Cananda); Booth Business School (USA, Chicago); Stern Business School (USA, New York); WP Carey School of Business (USA, Arizona); McDonough School of Business (USA, Washington); Hong Kong Polytechnic University, Industrial Engineering Department. Scientific impact is also demonstrated through the following: •2011 highly commended paper award (Wiengarten et al, 2010); •As a result of our experience using secondary data sources, the project team were invited to edit a Special Issue of the International Journal of Production Economics entitled: Operations Management Research Using Secondary Data; •An event methodology workshop was held at the University of Ulster and was made available to PhD students as part of their methodological training. The workshop involved colleagues from Hong Kong who collaborated on the project.

The scientific outputs from the project has impacted on academics in the following fields: • Operations Management • Business Policy • Business Strategy • Quality Management • Knowledge Management • Supply Chain Management • Outsourcing We expect the findings from our research to contribute significantly to, and provide empirical and theoretical foundation for future studies in the above areas. Presentation of the findings and theoretical models at an academic conference and seminars has already generated impact, for instance, leading to the establishment of new research links and networks. For example, the seminar at the Schulich Business School has generated potential research links with colleagues in the US, Spain and Ireland involving international comparative research in the use of the event methodology to Health and Safety data. In addition, we are looking to extend the research methodology to other operations management problems that could benefit from analyzing secondary data sources. The research has had an impact upon the next generation of researchers as a result of the methodology workshop referred to in previous section. There has been considerable interest in combining secondary data research using the event methodology approach, with primary data collection techniques.

From an economic and societal impact perspective, interim findings from the project suggest that a one size fits all approach to ISO 9000 certification may not ultimately lead to optimal outcomes. There is a need to move beyond simply justifying quality practices and to focus on a clearer understanding of the contextual effects. Based on the identified contextual factors, we divided organizations into three categories of contextual fitness, referred to as high, middle and low fitness. Our results suggest that the average impact of ISO 9000 on Return on Assets, in all sample firms, is about 1.9%. However, high-fit organizations (closely aligned to the contextual factors) obtain an increase in performance of 4.1% while low-fit organizations (little alignment with contextual factors) see an overall drop in efficiency of 0.5%. Hence, high fit firms obtain more benefit from ISO 9000 adoption compared with medium and low fit firms. It is appreciated that some firms are under pressure from customers to adopt ISO 9000. Managers need to question the efficacy of such an approach. Should organizations require suppliers to be ISO 9000 certified if their suppliers are, e.g., highly technology-intensive, highly automated (low labour intensity), and in a well-established industry (where high-quality requirements are already well embedded)? Our findings would suggest that this may not be a viable approach.

With regard to the three categories of fit, there are two issues that managers should address. First, they need to assess if their organisation should focus on ISO 9000. As an example, for a low labour intensity, high technology-intensive firm in a well-established industry, our results suggest that it should not focus on process standards like ISO 9000, as these organisations would likely be in the low-fitness category, where the implementation of ISO 9000 would lead to negative performance outcomes. It is probably better for such a firm to focus on management practices that fit or complement the firm’s environment, e.g., innovation, project management, and improving flexibility, rather than waste resources on implementing ISO 9000. Second, they need to consider what manufacturing practice innovations are important to them, given the environmental context in which they operate. The following outputs were achieved: • An article has been submitted to Focus (the International Standards Organisation (ISO) international practitioner magazine), entitled: One size fits all? The notion of fit in firm- and market-level scenarios for ISO 9000 adoption; • The findings from the research were presented to the Business Schools Taskforce (see next section) as an example of engagement with medium sized businesses (MSBs), a major focus of the UK Government’s Growth Agenda. In addition, a further presentation was given at an employers’ forum to illustrate how business schools can facilitate interaction with their local region. The final report, published in late 2012 by the Department of Business, Innovation and Skills is entitled: Business School/Medium Sized Business Collaboration – Supporting Growth in UK’s medium-sized businesses; • One of the project team was appointed to two ISO Standards Committees related to Quality Systems and Environmental Management Systems. The findings from the research have been presented to both committees.

We established a steering group comprising industry representatives (for example, the Confederation of British Industry) and policy advisors (for example, the Centre for Competitiveness). We sought the advice of the group throughout the study on the research methodology and the dissemination process. The following impacts were achieved: • As part of the UK Government’s ongoing Growth Review, in late 2011 the Department for Business, Innovation and Skills set up the UK Business Schools Task Force to advise Government on how to improve engagement MSBs to support their economic growth. The PI was invited to sit on the Task Force and this provided an opportunity to look at the potential for developing the competencies of MSBs in the area of business improvement and, in particular, with regard to quality practices. An employers’ forum was held to collect data on how to support MSBs. One of the key issues emerging from this forum was the need to for Business Schools to engage and support MSBs in the region as drivers of growth. One important area that MSBs concentrated on, was that given the changing global competitive landscape, was the need to be fully conversant in contemporary management practices, and in particular, with regard to quality practices. The findings from this review were presented to the task force and formed part of the final report that was launched by Michael Fallon (Minister for Business and Enterprise) at the Institute of Directors annual conference at the end of November 2012. The project has therefore had an important role in informing national policy as part of the ongoing growth debate within government; • The project has had a career impact on the research associate, Dr Frank Wiengarten, who was appointed as an assistant professor at ESADE Business School; • The findings from the study have been used in teaching at both undergraduate and postgraduate levels at ESADE, Hong Kong Polytechnic University and the University of Ulster.

As outlined above, practitioner and policy related outputs have been directed towards and have impacted upon the following people: • Officials from industry associations/trade bodies and members of these associations (for example, CBI); • Civil servants and officials in government agencies (for example, the Department of Business, Innovation and Skills); • Business Schools and those involved in engagement with industry, particularly with regard to improving competitiveness; • Operations management practitioners and students; • ISO members with a focus on quality systems.

The following initiatives are being developed as a result of the research project: • Discussions are taking place between the Ulster Business School, the CBI and Invest NI (a regional economic development agency) to develop a mini-MBA to support the recommendations of the MSB Business School Taskforce. It is anticipated that the content of such a programme will be based on our submission to the Taskforce report and will concentrate on business improvement, with an emphasis on quality management systems; • Given our experience in the use of event methodologies, a PhD studentship has been awarded to investigate the interrelationship between dynamic capability and ISO 14000 adoption; • A wider research agenda has been developed, with the expertise developed being applied to investigate health and safety incidences within the UK and their impact on operational and financial performance, particularly with regard to lean operations.

Cite this outcome

Harvard

Humphreys, Paul. Bilateral (HK):Are Quality Management Systems Effectively Adopted in China? A Longitudinal Analysis of ISO 9000 Adoption and Comparison with UK firms: ESRC Impact Report, RES-000-22-3638. Swindon: ESRC

Vancouver

Humphreys Paul. Bilateral (HK):Are Quality Management Systems Effectively Adopted in China? A Longitudinal Analysis of ISO 9000 Adoption and Comparison with UK firms: ESRC Impact Report, RES-000-22-3638. Swindon: ESRC.