A Resource Dependence Theory Perspective of ISO 9000

Journal of Operations Management 29 (2011) 4964
Contents lists available at ScienceDirect
Journal of Operations Management

journal homepage: www.elsevier.com/locate/jom
A resource dependence theory perspective of ISO 9000 in managing

organizational environment
Prakash J. Singh a, , Damien Power a , Sum Chee Chuong b
a
b
Department of Management & Marketing, The University of Melbourne, VIC 3010, Australia
Department of Decision Sciences, NUS Business School, National University of Singapore, Singapore
a r t i c l e
i n f o
Article history:
Received 13 January 2009
Received in revised form 31 March 2010
Accepted 13 April 2010
Available online 21 April 2010
Keywords:
ISO 9000 standard
Quality management
Organizational environment
Resource dependence theory
a b s t r a c t
More than 900,000 organizations worldwide have registered to the ISO 9000 quality management
standard. Despite its growing popularity, few studies have offered a coherent theoretical basis for the standards appeal. A theory-based explanation enhances understanding and appreciation for the standard,
and provides clarity on how the standard benets organizations. In this paper, we invoke the resource
dependence theory (RDT) to purport that the standard is used by organizations as a tool to manage their
organizational environment. It does this by specifying procedures that organizations need to manage their
organizationenvironment boundary spanning processes. Using the RDT perspective, a model with three
key constructs embodying ISO 9000 was developed: internal processes, relationships with customers
and relationships with suppliers. The latter two were treated as being part of the task environment. We
predicted that the external aspects of the standard affect operating performance (a measure of effectiveness), both directly and through internal processes. Empirical data from 416 ISO 9000 registered
Australian manufacturing plants validated the RDT perspective, and suggest that the three constructs,
individually and in isolation, are not as effective as when they are considered together. By invoking RDT,
a new theoretical viewpoint to ISO 9000 has been developed that adds to other theoretical perspectives,
and goes some way to explaining the growing popularity of this standard with organizations.
2010 Elsevier B.V. All rights reserved.
1. Introduction
Since its inception, there has been a remarkable growth in organizations registering to the ISO 9000 quality management standard,
with close to 900,000 registered organizations in existence in 170
countries (International Organization for Standardization, 2008).
Many researchers have sought to understand why organizations
choose to register. Much of this research is focused on internal justications, with the spotlight on how the standard assists
organizations to intrinsically improve their internal organizational
processes and performance (Adams, 1999; Benner and Tushman,
2002, 2003; Boiral, 2003; Tzelepis et al., 2006; Benner and Veloso,
2008). Others have explained the organizations decisions to register from an external perspective (Anderson et al., 1999; Guler
et al., 2002; Terlaak and King, 2006; Clougherty and Grajek, 2008).
This research stream has shown that some organizations register
to comply with market expectations and regulatory requirements,
and to improve their locational advantage.
Corresponding author. Tel.: +61 3 8344 4713; fax: +61 3 9349 4293.
E-mail address: pjsingh@unimelb.edu.au (P.J. Singh).
0272-6963/$ see front matter 2010 Elsevier B.V. All rights reserved.
doi:10.1016/j.jom.2010.04.002
These studies suggest that the standard plays a dual role in

addressing both internal and external functions. A close examination of the standard conrms this duality: the standard requires
organizations to develop and implement procedures that ensure
within-organization process variation reduction and control, as
well as coordinative processes with key external stakeholders
such as customers and suppliers. As such, it is evident that ISO
9000 extensively addresses both internal organizational processes
and external organizationenvironment boundary spanning activities. Yet, a review of the literature shows that studies that
address the dual nature are limited and lack a clear theoretical focus. Those that have (e.g., Boiral and Roy, 2007; Naveh
et al., 2004; Naveh and Marcus, 2004, 2005; Corbett et al., 2005)
done so in an indirect manner and from a myriad of theoretical perspectives. The extant literature reveals an incomplete,
fragmented and partial understanding of ISO 9000 registration.
More importantly, few studies have examined and offered an
integrative, theoretical exposition of the dual functionality of
ISO 9000.
In this study, we integrate the literature by proposing a theoretical basis that could account for its widespread interest. The
theoretical basis is achieved through: (1) identication of a theory
that integrates existing literature on the duality of ISO 9000; (2)
50
P.J. Singh et al. / Journal of Operations Management 29 (2011) 4964
development of a model based on the identied theory; and (3)

empirical testing of the theory-based model.
Given the internal and external perspectives of the standard,
we invoke ideas from a body of knowledge that has hitherto been
largely neglected, namely, the organizationenvironment relationships area. We propose that the resource dependence theory (RDT)
is a suitable organizationenvironment relationships theory to
explain the duality of ISO 9000. As described by Pfeffer and Salancik
(1978), RDT proposes that organizations engage with their environment to obtain resources. The basic assumptions of RDT are
that organizations are rarely internally self-sufcient with respect
to strategically important resources, thereby leading to dependencies on other organizations (Heide, 1994); and organizations seek to
reduce uncertainty and manage this dependency by carefully structuring their relationships with other organizations through formal
and semiformal means (Ulrich and Barney, 1984).
Invoking RDT, we posit that ISO 9000 is a tool that organizations
use to deal with conditions in their organizational environment.
Consistent with this theory, organizations use the standard to:
make changes to their internal processes to adapt to their organizational environments; attempt to change their organizational
environments; and do both of these if and when possible. We postulate that the standard plays facilitative internal and external roles
in enabling organizations to deal with contingencies in their environment.
This postulation is evaluated by analyzing the standard through
the lens of RDT because, prima facie, there is a good t between the
phenomenon (i.e., ISO 9000) and the scope of the theory. As such,
we identify the key constructs that embody the standard. We then
develop a model that relates these constructs. The theory-based
model was then tested for empirical validity with data from 416
Australian manufacturing plants that are ISO 9000 registered.
Our study makes several useful contributions. By providing
substantive theoretical grounding, we consolidate and enrich the
literature on a popular management context (i.e., ISO 9000 registration). Our theory-driven approach creates a more rigorous and
coherent understanding of the conceptual and practical aspects of
ISO 9000 registration. The theory-based model depicting relationships between the internal and external process constructs offers
prescriptive and managerial insights on the adoption of ISO 9000.
Our study also illustrates the applicability of the RDT to a new context, thereby demonstrating an additional application of the theory.
2. Literature review
2.1. Why organizations register to ISO 9000
Despite widespread popularity of the standard, there is still considerable debate regarding the primary driving forces of ongoing
adoption. Research that has addressed this issue can be grouped
into two categories: those that focus on internal justications,
and others that focus on external factors. Studies that are focused
internally are premised on the notion that the standard assists
organizations to improve their internal organizational processes
and performance (Adams, 1999; Benner and Tushman, 2002, 2003;
Boiral, 2003; Tzelepis et al., 2006; Benner and Veloso, 2008).
However, empirical evidence for this perspective is not all that compelling, with many studies showing that ISO 9000 based internal
management practices account for only modest levels of variance
in operating and other measures of performance (Terziovski et al.,
1997; Simmons and White, 1999; Lima et al., 2000; Rahman, 2001).
Further, questions have been raised as to why an organization
would go through the effort and expense of formal registration if
the motivation is limited only to internal process improvements
(Terlaak and King, 2006).
Partly as a reaction to this, several researchers have sought to

explain registration from an external perspective. This research
stream has shown that some organizations register to comply
with market and industry expectations, and conform to regulatory
requirements (Anderson et al., 1999), with the spread occurring
through isomorphic processes of coercive, normative and mimetic
behaviors (Corbett and Kirsch, 2001; Guler et al., 2002; Boiral, 2003;
Clougherty and Grajek, 2008). Also, some organizations use the
standard as a signal of their status to the market (Terlaak and
King, 2006). If these explanations (i.e., that organizations register for purely externally motivated reasons) are taken to their
logical conclusion, then organizations are likely to make minimum levels of change to their internal processes and practices,
just enough to achieve registration. As a consequence, signicant
improvements in internal performance are unlikely to be detected.
However, some organizations do seem to achieve discernible operating benets through registration (Carr et al., 1997; Terziovski
et al., 2003; Corbett et al., 2005), and so externally driven explanations alone do not adequately account for an organizations decision
to register. Further, implementation of the standard implies process
mapping, and by extension, in many cases, changes to processes in
order to achieve accreditation. There are, therefore, implications for
altered internal processes even if motivation is purely externally
driven.
The limited number of studies that considered both motivations
shows a general lack of convergence. Some studies show that internal motivations are more important than external motivations.
For example, Naveh and Marcus (2004) showed that the extent
to which ISO 9000 is associated with performance improvements
depends more on the level of its assimilation with the existing
internal processes combined with the degree to which an organization goes beyond the minimal requirements of the standard. They
also found that the extent to which the standards implementation
was externally coordinated with suppliers and customers was less
important. Similarly, Corbett et al. (2005) found that performance
improvements as a result of registration could be attributed more to
internal productivity improvements than externally derived marketing benets.
Other studies show a more complex relationship between internal and external motivations. For example, Naveh et al. (2004)
showed that organizations that register early (rst movers) do not
necessarily gain a competitive advantage over late registrants (second movers). Instead of timing, learning was found to be more
important. First movers register to the standard because of real
needs within the organization (technical efciency), and these
organizations learn from their own experiences. Second movers,
on the other hand, register because of customer pressure and fear
of falling behind competitors (external pressure); and they learn
from others. First and second movers follow different pathways, but
generate similar outcomes. In a related study, Naveh and Marcus
(2005) found that while installation of ISO 9000 requires both internal integration and external coordination, organizations achieve a
distinct operating advantage from the standard when they effectively internalize it by using it in daily practice and as a catalyst for
change.
In toto, the literature provides a rather fragmented and partial understanding of why organizations register to the standard,
how it works and the benets it provides. To improve clarity,
the standard needs to be reappraised to identify its key features
in a more holistic manner. Further, since the standard is replete
with prescriptions on organizationenvironment boundary spanning activities (see, for example, clause 5.2 Customer focus and
7.4 Purchasing, ISO 9001:2000), we believe that this aspect needs
careful analysis as this perspective has the potential to provide
insights into the standard that hitherto has not been covered in the
literature.
2.2. Organizational environment, resource dependence theory

and ISO 9000
Researchers in strategic management and organization theory
have long recognized the important role that organizational environment plays in inuencing the ability of organizations to survive
and prosper (Bourgeois, 1980; Frishammar, 2006; Cannon and St
John, 2007). The literature shows that environment has been studied from three perspectives: environment as objects, attributes or
perceptions (Bourgeois, 1980). Viewing environment as objects,
Dill (1958) and Bourgeois (1980) proposed a two-level categorization: task and general environments. The task environment
consists of suppliers, customers, and other stakeholders that the
organization closely interacts with and whose actions can directly
affect the organization, while the general environment is composed of multiple task environments that are sources of general
social, political, economic, demographic and technological trends
(Bourgeois, 1980). While task environment is within the realm
of an organizations inuence, the general environment is usually remote (Doty et al., 2006, p. 269) and cannot be inuenced
easily by an organization. Researchers have identied complexity, dynamism and municence as the three key properties of
environment (Dess and Beard, 1984; Sharfman and Dean, 1991).
Complexity refers to the heterogeneity and range of an organizations activities; dynamism refers to unpredictable change in
environmental conditions faced by an organization; and municence is the extent to which an environment supports growth of
organizations within it, and is often measured on a reverse scale
to environmental hostility (Ward et al., 1995). As for perceptions,
researchers use either objective or subjective measurement methods of the environment (Bourgeois, 1980; Boyd et al., 1993; Doty
et al., 2006).
A number of models and theories have been proposed to explicitly relate the interactions between organizations in the context
of the organizational environment. These include transaction cost
economics (Coase, 1937; Williamson, 1975), institutional theory
(DiMaggio and Powell, 1983), industry structure model (Porter,
1980), cognitive model (Weick, 1979), population ecology model
(Hannan and Freeman, 1977) and resource dependence theory
(Pfeffer and Salancik, 1978). Each of these models and theories
vary in their assumptions on what composes the environment, the
process and causes of environmental change, how managers and
researchers conceptualize it and how organizations respond to it
(Prescott, 1986; Frishammar, 2006).
In this paper, we have chosen to use the resource dependence
theory (RDT). RDT is based on social exchange theory as proposed by Emerson (1962) and became popular as a result of its
full exposition by Pfeffer and Salancik (1978). According to Pfeffer
and Salancik, organizations depend on others in their environment
for resources to ensure their ongoing viability. RDT predicts the
types of responses that organizations would exhibit depending on
the level and nature of dependence they develop, and the relative power of all players. It also provides guidance on how the
resource acquisition process can be facilitated and sustained. A
primary issue that RDT addresses, therefore, is the interchange of
resources between trading partners as a means by which environmental uncertainty is managed. In the last 40 years, many different
phenomena have been investigated using this theoretical lens,
including several operations management concepts (Handeld,
1993; Ward et al., 1995; Paulraj and Chen, 2007).
RDT was chosen because it extensively covers organization
environment boundary spanning activities, a view of ISO 9000 that
is of particular relevance to this study. Specically, many of the key
concepts, relationships and predictions that RDT covers are directly
relevant to the objectives and purposes of ISO 9000. This can be
illustrated with several examples.
51
First, RDT proposes that organizations that lack essential

resources to achieve their desired organizational outcomes will
seek to establish relationships with others to obtain the needed
resources (Pfeffer and Salancik, 1978, p. 2). The ISO 9000 standard
has several clauses that specify how these necessary resources can
be acquired. For instance, clauses 5.5.2 (Note), 7.4.1, 7.4.2, and 7.4.3
specify the resource acquisition processes relating to reliable and
qualied suppliers and clause 4.1 deals with outsourced parties that
the organization has control over.
Second, RDT includes customersupplier relationships
(Pfeffer and Salancik, 1978, p. 2) as a form of linkage that organizations have to their environments. Several elements of the ISO
9000 standard deal with customersupplier relationship aspects.
For example, clause 7.4.1 species that the organization has to
exert control over suppliers to ensure that purchased products
from external sources conform to specications. Clause 7.4.1 also
states that supplier selection, evaluation and re-evaluation have to
be established in accordance to the organizations requirements.
Proper verication processes including inspection and supplier
site verication have to be set up to ensure supply quality (Clause
7.4.3).
Third, the relationships described by RDT are expressed as coalitions being formed between trading partners largely with the aim
of managing uncertainty. RDT suggests that: . . .organizations seek
to avoid dependencies and external control, and at the same time,
increase stability and certainty in their own resource exchanges
(Pfeffer and Salancik, 1978, p. 261). ISO 9000 provides these capabilities to organizations through the formalized frameworks that
ISO standards are built upon. A primary goal of the ISO 9000 standard is to reduce processes to a form that can be mapped, learned
and replicated with a low level of variation. The incorporation into
the standard of specic clauses outlining how this may be achieved
with trading partners is consistent with the objective of reducing
variation at the inter-rm level. This objective can therefore be
explained in terms of RDT as being to reduce uncertainty in the task
environment through the building of trading partner coalitions.
Fourth, RDT conceptualizes the effects of environments on organizations using external and internal perspectives (Pfeffer and
Salancik, 1978, p. 2). The external perspective relates to organizational effectiveness that pertains to the assessment of the
organizations output and activities by each of the various groups
and participants (i.e., customers) (Pfeffer and Salancik, 1978, p.
2). On the other hand, the internal perspective is associated with
organizational efciency that accounts for the internal evaluation of the amount of resources consumed in the process of doing
this activity (Pfeffer and Salancik, 1978, p. 2). Both organizational
effectiveness and efciency are critical to the organizations continued survival and success. In the environmental context of ISO
9000 standard, the external and internal perspectives correspond to
customer relationship activities and internal process management
respectively. Specic customer relationship activities addressed
in the standard include: fulllment of customer requirements
and enhancement of customer satisfaction (e.g., through customer
feedback) (clauses 5.2 and 5.6.2); customer-related processes such
as customer engagement, customer requirements, product quality,
product delivery, customer communication, and customer complaints (clause 7.2); proper treatment of customer property (clause
7.5.4); and, guidelines on the monitoring and measurement of customer satisfaction (clause 8.2.1). Likewise, the management and
improvement of internal processes in relation to resource acquisition are addressed in the standard in the following manner:
stipulation that organizations should not only determine the processes for the quality management system but also ensure that
resources are made available to support the operation, control
and improvement of these processes (clause 4.1); afrmation of
the importance of exercising control over outsourced processes
52
(clause 4.1, Note 3); top management team being responsible for
improvement of internal processes and the provision of resources
(clause 5.1(e)), commitment to improve quality processes through
planning (clause 5.4), review (clause 5.6), policy (clause 5.3) and
internal communications (clause 5.5.3); resources to be provided to
enhance the competence and skills of employees through training
and education (clauses 6.2.1 and 6.2.2), and improve the infrastructure and work environment (clauses 6.3 and 6.4); and, proper
measurement, analysis and audit procedures to be established to
improve processes (clause 8.2.3).
Fifth, RDT suggests that there are some sociallegal apparatus
(Pfeffer and Salancik, 1978, p. 2) that dene and control the nature
and limits of the relationship between an organization and players
in its environment. The ISO 9000 standard could be viewed as one
such apparatus, given the prescriptive nature of some of its clauses.
Such an apparatus has the function of providing boundaries within
which trading partners can operate. These boundaries are informally dened by the nature of the resources being exchanged, but
even long-term trading partners require some form of contractual
denition of the limits of their relationship. ISO 9000 performs this
role in dening the nature and limits of the interactions that are
appropriate to meet the requirements of the standard (e.g., clauses
7.4 and 8.2.1).
Sixth, Pfeffer and Salancik (1978, p. 193) state that: . . .because
organizations are only components of a larger social system and
depend upon that systems support for continuing existence, organizations goals and activities must be legitimate or of worth to
that larger social system. ISO 9000 could be used as a source of
legitimacy by organizations in a form suggested by Sherer and
Lee (2002), that is, an accepted way of doing things with a technical rationale. Evidence of this legitimacy to society is provided by
the rapid uptake of the standard since its inception, and by the fact
that in economies where it has been established for long periods, it
has assumed the status of an order qualier, or a basic condition
that must be met in order to do business.
Seventh, RDT propounds that organizations engage with their
environment by adapting to it, changing the environment to suit
their circumstances (the enacted environment), or doing both.
ISO 9000 could assist organizations in achieving these outcomes
either as a result of the value that trading partners (both current and potential) place on achieving certication (adaptation), or
through developing closer collaborations with other organizations
(changing the environment). The speed with which the standard
has been adopted and recognized provides evidence of ISO 9000
facilitating adaptation. Further, the incorporation of collaborative
frameworks into the standard has been the result of an acknowledgement that processes are not just cross-functional, but also
cross-organizational. The formal recognition of this in the standard is evidence of a perceived need to better manage (at least)
the task environment through initiating change. As such, ISO 9000
is pro-active in providing frameworks for adaptation and change
consistent with the principles of RDT.
From the examples above, we believe that there is a good t
between the phenomenon under study (ISO 9000) and the theory
chosen for analysis (RDT).
2.3. Effectiveness of ISO 9000
RDT denes effectiveness as how well an organization is able
to manage the demands placed on it by interest groups who
provide resources and support to it (Pfeffer and Salancik, 1978).
As such, effectiveness is externally assessed. In the case of ISO
9000, its externally based effectiveness could be assessed through
the signaling effect generated by registration, i.e., an organization achieving registration status would be an indication of the
standards effectiveness for that organization. However, organiza-
tions do derive greater benets from the standard. For example,

benets from registration are accentuated when: the standard is
assimilated within existing internal processes which then perform
beyond minimal requirements of the standard (Naveh and Marcus,
2004); learning from own and others experiences are incorporated
in the implementation process (Naveh et al., 2004); and organizations internalize the standard by using it in daily practice and as a
catalyst for change (Naveh and Marcus, 2005). These suggest that to
assess the effectiveness of ISO 9000, a measure beyond the signaling
effect of registration status is needed.
Among typical measures of performance (such as nancial,
customer-related and operating), operating performance is probably best for capturing the effectiveness of ISO 9000. Operating
performance is often measured by variables such as inventory levels, defective product rates, reliability performance, lead times,
delivery performance, capacity utilization rates and wastage rates
of the organization (Venkatraman and Ramanujam, 1986; Gupta
and Somers, 1996; Terziovski et al., 1997, 2003; Tan et al., 1998;
Naveh and Marcus, 2004; Naveh et al., 2004). It depends not only
on its internal operations but also on its engagement with external stakeholders such as customers and suppliers. For example, the
level of inventory carried by an organization is affected by the reliability of its suppliers (raw materials), operations (work-in-process
inventories) and coordination with its customers (nished goods).
Studies that have examined the relationship between ISO
9000 registration and operating performance show no conclusive evidence of the standards effectiveness. Some studies found
insignicant differences in operational and nancial performance
between registered and non-registered organizations (Terziovski
et al., 1997; Simmons and White, 1999; Lima et al., 2000; Rahman,
2001), whilst others show that ISO 9000 registered organizations outperform non-registered organizations (Carr et al., 1997;
Terziovski et al., 2003; Corbett et al., 2005). In some cases, ISO
9000 registration appears to affect certain types of performance.
For example, registration improved operating performance, but not
business performance (Naveh and Marcus, 2005). This led Corbett
and Kirsch (2001, p. 328) to state that [t]here is little evidence
on how ISO 9000 certication affects quality or business performance. Likewise, Naveh and Marcus (2005, pp. 45) comment that
implementation of ISO 9000 should make an organizations operating performance go up, but consistent results that could verify
this proposition are not found in the literature.
2.4. Theoretical model and hypotheses
Fig. 1 outlines the theoretical model that guides this study. The
model proposes that the standard can be dened in terms of three
key constructs: internal processes, relationships with customers
and relationships with suppliers. We treat the internal processes
construct as being internal to the focal organization. For organizational environment, we focus only on the task environment as
organizations are able to inuence this, and not the general environment which organizations are not able to directly inuence.
The two constructs that deal with relationships with customers
and suppliers are placed in the task environment to reect important potential sources of resource linkages. Following the literature
(Handeld, 1993; Ward et al., 1995; Badri et al., 2000; Ward and
Duray, 2000; Kaufmann and Carter, 2002; Fuentes-Fuentes et al.,
2004; Sia et al., 2004), these are treated as pure exogenous variables and in this sense reect the boundary spanning activities of
an organization. For assessing predictive validity and effectiveness
of the standard, we include an endogenous operating performance
construct. We propose a partially mediated model where the two
constructs in the task environment affect operating performance
directly and through the internal processes construct. This reects
the boundary spanning activity, the ltering of resource require-
53
Fig. 1. Theoretical model.
ments and availability, and the propensity to adapt. In the following

sub-sections, we reappraise the standard and associated literature
to identify the elements and predicted relationships, and explain in
more detail the concepts and relationships hypothesized in Fig. 1.
2.4.1. Internal processes
The standard has a very strong focus on the internal processes
of implementing organizations. Indeed, the philosophy underlying
much of the standard is that organizations with solid operations
and processes will be in the best position to inuence the quality
of their products and services (Withers et al., 1997). The standard
denes processes as linked activities that use resources to enable
the transformation of inputs into outputs (ISO 9000: 2000, p.v). At
a more detailed level, this process approach involves a strong focus
on quality assurance and quality control activities within an organization. For organizations that successfully implement and utilize
ISO 9000, the main benet is the development of an effective system that assists in eliminating errors and thereby saves money that
is otherwise spent on rework and scrap (McAdam and McKeown,
1999). The standard requires that all processes and procedures that
affect quality be documented (Kirchenstein and Blake, 1999). This
makes ISO 9000 a highly documentation oriented system (Withers
et al., 1997; Hoyle, 1998; Naveh et al., 2004). Taking this positively,
ISO 9000 assists organizations to develop sound communication
systems through carefully documented procedures, process performance and failures (Tsiotras and Gotzamani, 1996; Withers et al.,
1997; Anderson et al., 1999). In sum, in a registered organization,
processes and activities affecting quality must be planned, controlled and documented (Johnson, 1997; Anderson et al., 1999). If
these are done well, then organizations would benet from reduced
error rates, scrap and rework. We therefore hypothesize that:
H1. The extent to which internal processes are based on ISO 9000
principles is positively related to operating performance.
2.4.2. Relationships with customers
ISO 9000 recognizes the contemporary reality of understanding and meeting customer preferences in order for organizations
to compete effectively (Hoyle, 1998; Conti, 1999). As such, the
standard has declared customer focus as one of its key principles, stating that organizations depend on their customers and
therefore should understand current and future customer needs,
should meet customer requirements and strive to exceed customer
expectations (clause 4.3(a), Customer focus, ISO 9004:2000). An
important objective of the standard is to give customers an assurance about the quality of products or services supplied (Carr
et al., 1997). In pursuit of this, organizations need processes
to produce products/services speedily and consistently to meet
customer expectations (Naveh et al., 2004). A well-designed, wellimplemented and carefully managed ISO 9000 quality management
system provides condence to implementing organizations that
the output of its processes meets customer expectations and
requirements (Johnson, 1997). In practice, this requires organizations to carefully and systematically determine customer
requirements (Karapetrovic and Willborn, 2001; Terziovski et al.,
2003) so that mistakes are not made in interpreting them (clause
7.2, contract review process, ISO 9000:2000). Should mistakes
occur, organizations must have appropriate processes for resolution. A continuous review and re-design of processes to meet the
changing requirements of customers can therefore be facilitated by
implementation of the ISO 9000 standard. The standard therefore
can serve as a formal mechanism for dependencies to be formed
between an organization and its customers through creating legitimacy, promoting stability of demand, and creation of resource
based linkages (i.e., the supplying organization becomes a resource
of choice).
Further, there is evidence that integrating internal processes and
customer interfacing activities can have a positive impact on operating performance (Frohlich and Westbrook, 2001; Vickery et al.,
2003). The explanation can be found in examples such as: access
to point of sale (POS) and other relevant customer data facilitating better capacity planning and scheduling (Cagliano et al., 2003);
delivery performance being facilitated by systems enabling customers to congure and specify product features (Stewart and
OBrien, 2005); and the relationship between lead time reduction
and the availability of unambiguous demand data (De Treville et al.,
2004). At a practical level, clearly specied contracts allow the
operations function to develop more efcient and effective produc-
54
tion and fulllment strategies. The ISO 9000 standard incorporates

many of these factors into requirements by dening customer
relationships in terms of awareness of customer requirements,
reduction in ambiguities related to specication of orders, and
clarication of contract specications and change management
processes. As well, the standard denes relationships with customers not just in terms of the nature and content of interactions,
but also in terms of specic processes and touch points in the organization to facilitate this relationship. These include processes for
dealing with customer complaints and the promotion of greater
customer satisfaction. In summary, we hypothesize that the ISO
9000 based relationships that organizations develop with their customers will impact their internal organizational processes, as well
as operating performance. This is presented formally and with reference to Fig. 1 as:
H2a. The extent to which customer relationships are based on ISO
9000 principles is positively related to operating performance.
H2b. The extent to which customer relationships are based on ISO
9000 principles is positively related to the extent to which internal
processes are based on ISO 9000 principles.
2.4.3. Relationships with suppliers
ISO 9000 incorporates supplier relationships as one of its eight
principles, stating that an organization and its suppliers are interdependent and a mutually benecial relationship enhances the
ability of both to create value (ISO 9004, 2000, p. 5). Relating
to RDT, this statement clearly reects the standard working as
sociallegal apparatus (Pfeffer and Salancik, 1978, p. 2), facilitating and recognizing that all trading partners are part of larger
social systems (Pfeffer and Salancik, 1978, p. 193). In practice,
organizations frequently require suppliers to be ISO 9000 registered as an assurance that products or services supplied are of
consistent quality (Uzumeri, 1997; Hoyle, 1998). The standard provides a minimum quality assurance system (Clements, 1993; Buttle,
1997). It requires an organization to select suppliers based on their
ability to supply product in accordance with the organizations
requirements (clause 7.4.1, Purchasing process, ISO 9001:2000).
It also stipulates that corrective actions be taken should mistakes
occur. Closer supplier relationships, and its consequent positive
impact on supply reliability, create greater certainty and stability in many areas of an organizations operations. The function of
the standard to alter the environment and create higher degree of
certainty regarding resource exchange is further illustrated. These
could include improved lead time prediction, waste reduction,
more effective scheduling of operations and increased productivity.
In sum, we hypothesize that the ISO 9000 based relationships that
an organization develops with suppliers will impact internal organization processes, as well as operating performance. Presenting
this formally and with reference to Fig. 1:
H2c. The extent to which supplier relationships are based on ISO
9000 principles is positively related to operating performance.
H2d. The extent to which supplier relationships are based on ISO
9000 principles is positively related to the extent to which internal
processes are based on ISO 9000 principles.
Organizations that are able to develop sound relationships with
suppliers are expected, on balance, to also be able to develop similar
sound relationships with customers. Evidence for this proposition
is particularly strong in the supply chain management literature.
Studies supporting this proposition include: the identication of
the concept of arcs of integration whereby organizations that
integrate processes and systems with one say, suppliers are also
found to be pursuing similar levels of integration with customers
(Frohlich and Westbrook, 2001); the important role of goal con-
gruence in facilitating dealings with multiple trading partners

in a supply chain (Rossetti, 2008); and, recognition of the need
to connect and coordinate supply and demand as expressed in
the emerging concept of demand chain management (Juttner,
2007). Conversely, organizations that struggle with one type of
stakeholder are expected to have similar difculties with another.
Presenting this notion formally, it is hypothesized that:
H2e. There is a positive association between the relationships
with suppliers and relationships with customers for ISO 9000 registered organization.
3. Research methods
3.1. Study participants
The empirical data to test the theoretical model and hypotheses
presented in the previous section was collected through a postal
survey targeting ISO 9000 registered organizations in the manufacturing industry in Australia. This industry was one of the rst to
embrace the ISO 9000 standard on a large-scale basis during the
1980s and 1990s. As a result, it has relatively long experience and
accumulated knowledge of the standard.
Since ISO 9000 certicates are predominantly issued at the
plant level, this level of analysis was chosen for this study. Corbett
et al. (2005) argue that the plant is the most suitable level for
such studies. The Joint Accreditation System-Australia and New
Zealand (JAS-ANZ) Register (Standards Australia, 2004) was used
for the purpose of selecting the sample of plants. This register is
a database of all plants registered to various standards, including ISO 9000. The four-digit standard industrial classication code
for the manufacturing sector starts with 2; plants falling in the
20002999 SIC range were targeted. An initial list of 1300 plants
was compiled. After checking to ensure that large companies did
not have multiple plants included in the sample, a nal target
sample size of 1053 plants was obtained. The survey was carried out in two waves. The rst wave involved a mailout to the
whole sample. This was followed up by a repeat mailout to nonrespondents a month later. The number of responses received was
418. Two of these had excessive missing data, and were excluded.
The nal sample size was 416, representing a response rate
of 40%.
The database also provided names and contact details of
persons-in-charge of ISO 9000 registration in the organizations.
Thus, we used the key informant approach where the person in
charge of quality (quality/production/operations manager) was
selected to complete the questionnaire. This person is deemed to
be best to provide ISO 9000-related operational information at the
specic plant.
To assess bias in terms of sample representativeness of the
total population of manufacturing organizations, industry subdivision comparisons were made. Table 1 shows that the proportion
of organizations in the country, JAS-ANZ Register, the sampling
frame and our sample are not signicantly different in eight of
the ten sub-industry groups. Exceptions are the food, beverages
and tobacco categories where our sample seems to be underrepresented, and the metal products category where our sample
is a little over-presented. These differences are not large, and suggest that the sample was likely to be free from signicant bias, and
reasonably representative of manufacturing organizations in the
country.
As Table 1 shows, plants from our sample were mainly from the
metal products (26%) and machinery and equipment (9%) manufacturing industry sub-categories. Table 2 provides the prole of the
participating plants. The participating plants were predominantly
small plants with almost half having less than 100 employees and
55
Table 1
Assessment of extent of bias of sample based on industry sub-categories of the manufacturing organizations.
Manufacturing sector
Proportion of manufacturing
organizations in the country in
20042005 (Australian Bureau
of Statistics, 2006), N = 131,183
(%)
Proportion of
plants listed in the
JAS-ANZ Register
(2004), N = 7418 (%)
Proportion of
plants in samplea ,
N = 1053 (%)
Actual responding
plants N = 416 (%)
Food, beverage and tobacco

Textile, clothing, footwear and leather
Wood and paper product
Printing, publishing and recorded media
Petroleum, coal, chemical and associated product
Non-metallic mineral product
Metal product
Machinery and equipment
Other manufacturing
More than one sector
No response
Total manufacturing
6.5
11.5
7.5
11.9
5.9
4.3
16.9
20.2
15.2
100
9
3
5
6
15
10
19
30
2
100
10
3
8
8
13
9
17
26
6
100
8
4
2
5
6
2
26
9
30
6
3
101b
a
Some plants provided a number of ANZSIC codes, indicating that they were engaged in several types of activities. The descriptions of these plants were reviewed and
they were categorized based on their main manufacturing activity.
b
Total exceeds 100 due to rounding errors.
$A10 million in annual revenue. Fifty seven percent were registered

to the standard for less than 3 years.
3.2. Constructs development and measurement issues
Based on the review of the standards and related literature, sets
of items were developed to measure the four constructs shown in
Fig. 1. Specically, the internal processes construct was measured
with nine items. The relationships with customers and relationships with suppliers constructs were measured with six and ve
items respectively while the endogenous construct, operating performance, was measured with seven items. Summary descriptions
of these constructs are shown in Table 3, with the exact wordings
of the items as used in the measurement instrument presented in
Appendix 1.
Perceptual measures were used throughout for all items. While
use of this measurement type is relatively uncontroversial for
management practices, this is not the case for performance.
Using managerial perceptions to measure performance can be
problematic due to the inherent subjectivity involved. However,
using direct objective measures is not without problems either.
Corbett et al. (2005), and Naveh and Marcus (2004) demonstrate
the difculties of obtaining and using objective plant level data.
In favor of perceptual measures, Venkatraman and Ramanujam
(1986) show that senior executives perceptions of their companies
performance correspond closely to objective measures. Further,
Meredith (1995) argues that the information compiled from the
perceptions of key participants is often better than limited collections of incomplete objective data gathered independently by
researchers. On balance, we consider the perceptual measures of
operating performance to be adequate for the purpose of this
study.
Table 2
Demographic characteristics of plants participating in the study.
Characteristic
Plant size
Micro to small (less than 100 employees or less than
$Aus10m in revenue p.a.)
Medium to large (greater than 100 employees or greater
than $ Aus10m in revenue p.a.)
Time since registration to standard
Less than 3 years
Greater than 3 years
Number
224
192
239
177
3.3. Data analysis procedure

Survey data of the type collected in this study can be analyzed using either exploratory or conrmatory approaches
(Malhotra and Grover, 1998). Given that our study involves testing pre-specied relationships between variables developed from
theory-based expectations on how and why variables were related,
the conrmatory approach was adopted. To test the hypothesized relationships in the theoretical model (Fig. 1), we used the
structural equation modeling (SEM) multivariate technique. This
technique is ideally suited to our purpose for several reasons (Hair
et al., 2006). First, SEM is able to estimate multiple and interrelated
dependence relationships. There are six such relationships shown
in Fig. 1. Second, SEM is able to represent unobserved concepts
in these relationships and account for measurement error in the
estimation process. Four such constructs are presented in Fig. 1.
Third, SEM is able to simultaneously and comprehensively assess
the entire set of relationships in a model. Fig. 1 has six relationships
which would benet from simultaneous assessment.
Besides testing the theoretical model, SEM was also used to test
some of the psychometric properties of the constructs. We used the
AMOS 5.0 software package, and utilized the maximum likelihood
(ML) estimation technique.
3.4. Data condition and psychometric properties of constructs
3.4.1. Distributional properties, outliers and missing data
The distributional properties of each variable were reviewed.
Nonnormality could lead to downwardly biased standard errors
that would result in an inated number of statistically signicant
parameters (Muthen and Kaplan, 1985; Byrne, 1994). All univariate statistics mean, standard deviation, skewness and kurtosis
(Appendix 2) suggested that there were no signicant departures from normality based on thresholds suggested by Chou and
Bentler (1995). However, Mardias (1970) coefcient of multivariate kurtosis was 143, which is above the threshold value of 10
(Ory and Mokhtarian, 2009), suggesting multivariate nonnormality.
However, a number of studies have shown that ML is reasonably
robust to multivariate nonnormality (Hu and Bentler, 1995; Ory
and Mokhtarian, 2009). As such, the departure from multivariate
normality was not regarded as a serious issue in our analysis. As for
outliers, since all variables were measured on a ve-point Likert
scale, the dataset was carefully reviewed to ensure that there were
no data-entry related errors present. Also, Mahalanobis d-squared
distance measures did not suggest that any of the cases were signif-
56
Table 3
ISO 9000 key management practice and performance constructs.
Constructs
Description of constructs
Supporting literature
Internal processes
ISO 9000 requires organizations to ensure that: the quality

assurance processes meet customer requirements; products
are checked against orders before delivery; equipment to
test/inspect products/processes are available;
products/processes are regularly tested/inspected; products
that cannot be tested are continuously monitored; everyone in
the organization is aware of what happens to products that fail
inspections; and, handling/storage/delivery methods minimize
quality-related problems
ISO 9000 registered organizations: are aware of customer
requirements; have processes/activities that are designed to
increase customer satisfaction; have systems to avoid
misunderstandings about customer orders; systematically
review contracts; and have systematic processes for handling
complaints
The supplier-related issues that are relevant to ISO 9000 are:
organizations seek assurance of quality from suppliers;
suppliers are chosen on the basis of quality; there are minimal
misunderstandings about orders placed with suppliers; quality
of supplied products/services are assessed; materials from
customers and suppliers are all treated in the same way; and,
suppliers that are subcontractors are suited to the tasks they
perform.
Some of the measures that indicate that an organizations
outputs have consistent quality are steady levels of: costs
relating to quality of products; defective product rates; and,
product performance and reliability levels.
Tummala and Tang (1996), Johnson (1997),

Withers et al. (1997), Anderson et al. (1999),
Conti (1999), McAdam and McKeown (1999),
Naveh and Erez (2004) and Naveh and Marcus
(2005)
Relationships with customers
Relationships with suppliers
Operating performance
icant multivariate outliers. Missing data, which averaged about 3%

per variable, were replaced with values estimated by the expectation maximization algorithm as this procedure does not introduce
bias (Hair et al., 2006).
3.4.2. Conrmatory Factor Analysis
Conrmatory Factor Analysis (CFA) was performed to assess
how well the items listed in Appendix 1 estimated the four constructs. The CFA model is a structural equation model where the
constructs are all co-varied with each other. The analysis showed
that ve items had standardized factor loadings that were smaller
than 0.5 (IOP9, RC5, RC6, RS5 and OP6 in Appendix 1). This meant
that the prescribed constructs accounted for less that 25% of the
variances of these items. As is permissible for scales that are newly
developed (Hair et al., 2006), we decided to drop these ve items.
CFA was performed again without the ve items.
As in typical SEM analyses, a number of commonly reported
indices were obtained to assess the goodness-of-t of models
with data. For our revised CFA model, these t indices were
as follows: 2(df=203) = 607 with p-value = 0.000; 2 /df = 2.989;
goodness-of-t index (GFI) = 0.880; adjusted goodness-of-t index
(AGFI) = 0.850; TuckerLewis index (TLI) = 0.836; comparative t
index (CFI) = 0.856; root mean square residual (RMR) = 0.032; and,
root mean square error of approximation (RMSEA) = 0.069.
There is no simple way to decide how well these indices
describe goodness-of-t. Bollen and Long (1993) and others have
proposed a graduated list of terms to describe model-data t.
These include: perfect, strong, acceptable, adequate, marginal,
weak, mediocre, poor and no t. To decide how well the model
ts the data, the general recommendations are that the p-value
associated with 2 statistic should be greater than 0.05; GFI, AGFI,
TLI and CFI should be close to 1.0; and, RMR and RMSEA values
should be close to 0.0. In our CFA model, the 2 statistic p-value is
0.000, suggesting poor t. However, this t measure has a tendency
to produce negative results with sample sizes greater than 200, and
so was disregarded since our sample size was 416. The value for
2 /df of 2.989 suggests acceptable t, this being below the conventional threshold value of 3.0 (Schermelleh-Engel et al., 2003; Hair
Carr et al. (1997), Johnson (1997), Hoyle

(1998), Conti (1999), ISO 9001 (2000), Clause
7.2, Contract review process, Clause 4.3(a),
customer focus; Karapetrovic and Willborn
(2001), Terziovski et al. (2003) and Naveh et al.
(2004)
Clements (1993), Buttle (1997), Hoyle (1998),
ISO 9001 (2000), Clause 7.4.1, Purchasing
process
Venkatraman and Ramanujam (1986),

Williams et al. (1995), Gupta and Somers
(1996), Terziovski et al. (1997), Tan et al.
(1998), Terziovski et al. (2003), Naveh and
Marcus (2004) and Naveh et al. (2004)
et al., 2006; Schreiber et al., 2006). As for other measures of t, Hu

and Bentler (1999) have recommended to use conventional values
between 0.9 and 0.95 for indices such as GFI, AGFI, TLI and CFI; and
0.050.08 for RMR and RMSEA as cut-off values for acceptable t.
If these cut-off criteria are applied to our CFA model results, we
would conclude that t is good for RMR and RMSEA, but poor for
GFI, AGFI, TLI and CFI. However, the conventional cut-off criteria are
considered to be excessively stringent (Schermelleh-Engel et al.,
2003; Marsh et al., 2004; Sharma et al., 2005; Hair et al., 2006).
Less stringent cut-off criteria where factors such as model complexity, sample size and number of observed variables are taken
into account have been proposed by Sharma et al. (2005) and Hair
et al. (2006). For example, Sharma et al. (2005, pp. 941942) suggest that for datasets similar to ours, more liberal cut-off values
(e.g., 0.8) should be used for normed t indices such as GFI and TLI.
Applying these criteria to our revised CFA model, we believe
that, overall, an adequate level of t has been obtained. Our results
and t assessment is similar to many studies in the operations management area (Tan, 2001; Frohlich, 2002; Hult et al., 2002; Douglas
and Fredendall, 2004). For example, Hult et al. declared moderate but acceptable model t (2002, p. 581) based on CFI = 0.84,
AGFI = 0.86 and RMSR = 0.08. We used the items in the revised CFA
for all subsequent data analyses.
3.4.3. Face validity
The lists of ISO 9000 based management practices and operating performance items assigned to constructs were arrived at
through a review of the standard and research literature. This is
summarized in Section 3.2. Further, the measurement instrument
was scrutinized by eight experts in the area and pilot tested in 21
organizations. Thus, we believe that the constructs and their associated items have good grounding in the standards and associated
literature, and therefore possess sufcient levels of face validity.
3.4.4. Multicollinearity
Pearson correlation coefcients between the 22 items are shown
in Appendix 2. If inter-item correlations are greater than 0.9, the
possibility that multicollinearity (i.e., the two items are essentially
57
Table 4
Summary of reliability and convergent validity tests.
Construct
Number of items
Cronbachs alpha
reliability
coefcient
Construct
reliability
coefcient
Normed t index
(NFI)
Non-normed t
index (NNFI)
1. Internal processes
2. Relationships with customers
3. Relationships with suppliers
4. Operating performance
8
4
4
6
0.829
0.679
0.655
0.767
0.835
0.694
0.668
0.774
0.894
0.954
0.917
0.870
0.911
0.961
0.923
0.882
measuring the same entity) exists is high (Hair et al., 2006). As none
of the correlation coefcients is greater than 0.9, multicollinearity
does not appear to be present.
3.4.5. Reliability
Two estimates of reliability were obtained alpha reliability
coefcients (Cronbach, 1951) and construct reliability coefcients
(Hair et al., 2006, p. 777) for all four constructs. Table 4 shows that
the coefcients range from 0.655 to 0.835. These exceed the minimum threshold level of 0.6 for acceptable reliability for newly
developed constructs (Nunnally, 1978). Therefore, the selected
items reliably estimated the constructs.
3.4.6. Convergent and discriminant validity
Convergent validity (i.e., items assigned to a construct contribute roughly equally to the constructs measurement) and
discriminant validity (i.e., items only estimate the construct to
which they are assigned and not any others) were both primarily
assessed using the CFA model testing approach. Having concluded
earlier that the revised CFA model generally had adequate empirical support, we then carried out an assessment of the convergent
and discriminant validities.
The convergent validity of the constructs was generally supported by the estimated factor loadings of items on constructs. All of
the standardized loadings were greater than 0.5, statistically significant (at p-values <0.001) and positive in sign. Another assessment
of convergent validity was obtained through SEM goodness-of-t
measures called the normed t index (NFI) and non-normed t
index (NNFI) (Ahire et al., 1996) obtained from testing each construct as a one-factor congeneric model (Joreskog, 1971). These
t indices measure the proportion of improvement of the overall t of the theoretical model relative to a null model. Table 4
shows that the NFI ranged from 0.870 to 0.954 and for NNFI, from
0.882 to 0.961. These values suggest that the one-factor congeneric
models were signicantly better than their respective null models,
thereby suggesting adequate levels of convergent validity for all of
the constructs.
Discriminant validity was tested in three separate ways. The
rst method involved inspection of correlations between the constructs. From the CFA model results shown in Table 5, it can be seen
that these correlations were mostly moderate, ranging from +0.629
to +0.790. According to Kline (2005, p. 60), if correlations between
factors in a CFA model are not excessively high (e.g., >0.90), then it
is unlikely that items assigned to one construct are loading signi-
cantly highly on others. In our case, all the factor correlations were
well below 0.90, suggesting that all items were unidimensional
(i.e., items collectively estimated one single construct) and that
there was unlikely to be a problem associated with discriminant
validity. The second method for assessing discriminant validity
involved the examination of chi-square difference between all pairs
of constructs. Anderson and Gerbing (1988) suggest testing two CFA
models for each pair of constructs. The rst model is where the correlation coefcient is constrained to 1.0, and the second is free to
estimate. If the difference in chi-square values between these models is signicant, then both constructs possess discriminant validity.
As can be seen from Table 5, all chi-square differences were significant at p-value of 0.000. Therefore all constructs were distinct and
possessed discriminant validity. The third way in which discriminant validity was assessed was by comparing the average variance
extracted (AVE) with the shared variance (i.e., square of the correlation) between each pair of constructs. According to Fornell and
Larcker (1981), if the AVE values for both constructs that make up
the pair are higher than the shared variance, then this indicates that
these constructs account for a greater proportion of the variances of
the items that are assigned to them. The variances accounted by the
construct to which the items are not assigned are proportionately
less. Table 5 shows that most of the constructs have AVE values that
are lower than the square of the correlation coefcients. It would
appear that according to this measure, the items do not provide
all the constructs with strong levels of discriminant validity. To
improve this measure of discriminant validity, we followed some
of the procedures suggested by Farrell (2009). This involved examining the modication indices to see if there were any suggested
relationships for improving model-data t. However, as none of
the suggested modications for improved model-data t could be
explained theoretically, no modication was implemented.
The rst two methods provide evidence for discriminant validity whilst the third does not suggest strong support. This is not
uncommon, as studies have shown that it is possible to obtain
inconsistent outcomes depending on how discriminant validity
is measured (Farrell, 2009; Schriesheim and Cogliser, 2009; Shi
et al., 2009). For example, Shi et al. (2009) found in their study
that one of the four methods for testing discriminant validity did
not provide positive support. Similar to Shi et al. (2009), on balance, since two of the three tests were positive, we conclude
that the constructs have reasonable levels of discriminant validities. Furthermore, we have interpreted the results of our study
cautiously.
Table 5
Results for discriminant validity tests.
Construct
Percentage
variance
extracted
Correlation
coefcient
Chi-square difference and p-value for CFA models,

with correlation between constructs constrained to 1.0
and freely estimated
Construct
Construct
1
1. Internal processes
2. Relationships with customers
3. Relationships with suppliers
4. Operating performance
38.9
36.7
33.7
36.6
1
0.703
0.788
0.616
2
1
0.790
0.629
1
0.696
71.1 (p = 0)
33.7 (p = 0)
214.7 (p = 0)
23.7 (p = 0)
105.5 (p = 0)
65.3 (p = 0)
58
3.4.7. Nomological validity

The correlations between the constructs could be used to assess
nomological validity as they refer to the degree to which the
constructs make accurate predictions of other concepts in a theoretically based model (Hair et al., 2006). Table 5 indicates that
the correlations between exogenous and endogenous constructs
are at moderate levels. These provide nomological support for the
theory-based development of the hypotheses presented earlier.
would have answered the questionnaire differently from responding organizations. The two approaches independently suggested
that non-response bias was low.
This section has shown that the constructs had been well
measured. Generally, the constructs and their items had sound psychometric properties, i.e., errors were within tolerable range and
levels of reliability and validity were higher than conventionally
acceptable in most cases.
3.4.8. Criterion-related validity

Criterion-related validity investigates the empirical relationship
between the scores on a test instrument (predictor) and an objective outcome (the criterion) (Flynn et al., 1990). As our instrument
used perceptual measures for organizational practices and operating performance, corresponding objective measures would be
required to evaluate this type of validity. To obtain objective data
proved to be difcult, with only three participating plants willing
to provide such data. Criterion-related validity of the measurement
items could not be established with certainty.
4. Results
3.4.9. Common methods bias

Since all items were measured using ve-point Likert scales
and responses were received from a single individual in the organization, there is a possibility that common methods bias could
be present. We performed Harmons one-factor test (Podsakoff et
al., 2003), using a conrmatory approach to test for this possibility. This involved testing a one-factor congeneric model, where
all 22 items were loaded onto a single common factor construct. The SEM results of this test indicated that common methods
bias was unlikely to be present, with the goodness-of-t indices
for this model indicating poor t with data. The indices for
Harmons one-factor congeneric model were: 2(df=209) = 904, pvalue = 0.000; 2 /df = 4.327; GFI = 0.815; AGFI = 0.776; TLI = 0.727;
CFI = 0.753; RMR = 0.041; and, RMSEA = 0.090.
3.4.10. Non-response bias
Non-response bias was assessed by testing for differences
between respondents to the two waves of the survey (rst-phase
respondent n1 = 236, second-phase n2 = 180). It was assumed that
organizations that responded in the second phase were reacting to
reminder notices sent to them, and they would otherwise have been
non-respondents. Preliminary statistical analysis using t-tests of
responses between the two waves showed little difference. Further
assessment of non-response bias was made by subjecting the CFA
to a two-stage multigroup analysis (MGA) (Bollen, 1989; Joreskog,
1998; Rigdon et al., 1998), with the groups being rst-phase respondents and second-phase respondents. In the rst stage of MGA, the
CFA model was tested in which all the parameters were freely estimated in the presence of the two moderator groups. The second
step was to determine if the MGA showed a signicant change in
t when all the parameters being inuenced by the moderator were
constrained to be equal across the two groups. If a signicant reduction in t occurred, then this would suggest that the moderator was
acting. The rst stage MGA t was: 2(df=406) = 876, p-value = 0.000;
and the second stage MGA was 2(df=416) = 892, p-value = 0.000. The
ination in 2 statistic is 16 with 8 degrees of freedom, which has an
associated p-value of 0.042. Applying the conventional cut-off value
of 0.05, this indicates that same pattern of measurement relationships exist for the two groups. Non-response bias did not appear to
be a problem when assessed with this method.
We also assessed non-response bias through telephone interviews with 20 randomly selected non-responding organizations.
The main cited reasons for non-response included: lack of time,
company policy of not disclosing information and not interested. None of these reasons suggested that these organizations
4.1. SEM results for theoretical model

As with the CFA model, we used the SEM analysis procedure
to assess the hypothesized relationships in the theoretical model
presented in Fig. 1. Fit indices for the hypothesized model were
the same as the revised CFA presented earlier since the number
of parameters to be estimated is exactly the same for the two
models. These t indices are as follows: 2(df=203) = 607 with pvalue = 0.000; 2 /df = 2.989; GFI = 0.880; AGFI = 0.850; TLI = 0. 836;
CFI = 0.856; RMR = 0.032; and, RMSEA = 0.069. These indices suggest
that the theoretical model has adequate level of empirical support.1
4.2. Evaluation of theoretical model parameter estimates
Fig. 2 presents the structural model parameters within the
theoretical model. These are in standardized form (regression, relevant squared multiple correlation, and correlation coefcients). The
results have several noteworthy aspects. In terms of the magnitude
and sign of the relationships, only two relationship (H1 and H2a)
are statistically insignicant in magnitude, having p-values greater
than 0.05. All of the other relationships are statistically signicant
in magnitude (p-values less than 0.05 or 0.1) and positive in sign,
as hypothesized.
We further analyzed the regression and correlation data presented in Fig. 2 by examining the standardized effect sizes between
the constructs. Effect size is the increase/decrease in the endogenous construct (in standard deviation units) when there is a one
standard deviation increase in the exogenous construct. Table 6
shows the standardized direct effects, indirect effects (calculated
using the path analysis tracing rules described by Kline, 2005, pp.
6669) and total effects of all the exogenous constructs on the
endogenous constructs of the model. Table 6 indicates that while
some of the direct effects are relatively small, the indirect effects
are of signicant magnitude such that when the direct and indirect effects are added together, the total effect sizes in all cases are
moderate to strong in magnitude and positive in sign.
5. Discussion
5.1. Signicance of results obtained
5.1.1. Hypothesized relationships within theoretical model
The results in Fig. 2 show that H1 (the extent to which internal processes are based on ISO 9000 principles is positively related
to operating performance) is not supported. This relationship is
weak (standardized regression coefcient = +0.139, p-value greater
than 0.1). As such, we conclude that the internal organizational
processes based on the prescriptions within the standard are statistically insignicant predictors of plant operating performance. This
1
To further conrm this result, a 2 difference test can be used whereby the 2
value for the hypothesized model is compared to CFA model (Anderson and Gerbing,
1988). However, in our case, the CFA and the hypothesized model had the same
numbers of parameters. Hence, this 2 difference test could not be meaningfully
performed.
59
Fig. 2. Theoretical model, showing maximum likelihood estimates of standardized regression coefcients (on straight lines single-arrowheads), squared multiple correlation
coefcients (on constructs) and correlation coefcients (on curved lines with double-arrowheads).
0.05 < p-value 0.1; **0.01 < p-value 0.05; ***p-value 0.01.
lack of direct relationship can be explained by the limited range

of benets that ISO 9000 of itself is able to generate for organizations. While ISO 9000 based procedures ensure that processes
are constantly monitored and measured, and that remedial actions
and early interventions are taken to reduce defect rates, Naveh and
Marcus (2004, 2005) and Naveh et al. (2004) showed that other
organizational interventions are required in conjunction with ISO
9000 practices to produce substantial improvements in operating
performance. As an extension of these studies, we are proposing in
this paper that the real value of ISO 9000 lies not in the intrinsic
direct benet that it may deliver, but in the mechanism it provides
to facilitate resource exchange between trading partners, boundary spanning, legitimacy and the capability to adapt. As such, our
result for H1 is not surprising, and points toward the validity of
RDT as an explanation of the role that ISO 9000 plays within the
organization. Further, this result supports the view that the standard is a minimalist approach to quality, an early stage of the
quality management maturity model (Conti, 1999; Conti, 2004).
Similar to Corbett et al.s (2005) interpretation, the standard could
be regarded as, using Hills (2000) terminology, an order qualier rather than an order winner. Finally, there is doubt as to the
extent to which internal processes that are based on ISO 9000 principles can affect operating performance. Several studies show a
non-signicant relationship between ISO 9000 adoption and operating performance (Terziovski et al., 1997; Simmons and White,
1999; Lima et al., 2000). Our result for H1 is similar to those in
these studies.
For H2a (the extent to which customer relationships are based on

ISO 9000 principles is positively related to operating performance),
the results show that this direct effect is not signicant (standardized regression coefcient = +0.139, p-value greater than 0.1). As
for H2b (the extent to which customer relationships are based on
ISO 9000 principles is positively related to the extent to which
internal processes are based on ISO 9000 principles), the effect is
signicant, but the strength of the relationship is moderate (standardized regression coefcient = +0.212, p-value between 0.05 and
0.01). As H1 is not supported, therefore, both the direct (H2a) path
and the mediated indirect (H2b H1) path between relationships
with customers on operating performance do not have strong support. We conclude that the customer relationship aspects of the
standard are not signicantly effectual in generating operating level
performance improvements. This outcome is consistent with several studies in the literature. For example, Rahman (2001) and Carr
et al. (1997) found that organizations without ISO 9000 registration were better at customer management and customer focus
practices than registered organizations.
This outcome could be explained in a couple of ways. First, the
scope of customer-related practices embodied within the standard
might be rather limited. In essence, the standard requires organizations to develop procedures and systems such that errors in
communication with customers are minimized. This is important,
but may not be adequate to cover all aspects of an organizations
relationships with its customers. Naveh and Erez (2004), Yeung
(2008) and Sila (2007) suggest that other quality improvement
Table 6
Effects decomposition of paths in the hypothesized model.
Exogenous construct:
Direct effect
Indirect effect
Total effect
Endogenous construct: internal processes

0.212
0.620
0.490
0.167
0.702
0.787
Endogenous construct: operating performance

Internal processes
0.182
0.443
0.139
0.447
0.253
0.629
0.696
0.139
60
practices need to be instituted to realize full customer-related

benets of the standard. It appears that the benets of ISO 9000
are limited to being customer satiscing, and the standard is
some way from being an instrument that enables organizations to
achieve Kanos (1984) concept of delighting the customer. Second,
RDT predicts that despite the best efforts of focal organizations,
customers may not necessarily engage proactively in a reciprocal manner if it is to their advantage. Customers can withhold
vital information, act opportunistically, and keep their suppliers at
arms-length if it suits their purpose. There is a possibility that this
could be the case in this study. Our study participants are all from
the manufacturing sector, with the majority from the machinery,
equipment and metal working sub-sectors. Market concentration
in these sectors is low, and there are lots of suppliers with small
market shares. Combined with the fact that most of the plants
in this study are micro, small or medium in size, it is likely that
they are subjected to the exploitative behavior on their customers
part given their economic dependence on them, as predicted by
RDT. Within this context, ISO 9000 may not be a powerful enough
tool to overcome the opportunistic behavior of customers. Further, customer relationships (as currently dened by the ISO 9000
standard) create a resource of value to the customer that may not
be easily reected in the operating performance of the organization. The creation of legitimacy, for example, may have value in
the eyes of the customer that may not be reected in operating
performance.
Hypotheses H2c (the extent to which supplier relationships are
based on ISO 9000 principles is positively related to operating
performance) and H2d (the extent to which supplier relationships
are based on ISO 9000 principles is positively related to the
extent to which internal processes are based on ISO 9000 principles) are partially supported. The direct effect predicted in H2c
is supported (standardized regression coefcient = +0.443, p-value
between 0.01 and 0.05). Also supported is H2d (standardized
regression coefcient = +0.620, p-value less than 0.01). However,
since the magnitude of the relationship in H1 is not strong, the full
indirect effect (H2d H1) in the partially mediated model is not
strongly supported.
The strengths of the paths emanating from relationships with
suppliers (H2c and H2d) were as expected, as the standard has
been historically strongly focused on suppliers to focal organizations. The standard prescribes many practices relating to suppliers.
Evidently, many focal organizations are able to do these reasonably
easily, e.g., seek quality inspection data from suppliers. From a RDT
perspective, the results suggest that ISO 9000 is able to assist focal
organizations to effectively manage their relationships with suppliers. This is opposite to the ndings on the utility of the standard
with respect to customers, and again may reect ISO 9000 as an
apparatus or platform for controlling relationships with suppliers, and for promoting stability. This result provides evidence to
suggest that the standard plays an important boundary spanning
role in promoting control, and by implication providing a capability
to adapt.
For hypothesis H2e (there is a positive association between the
relationships with suppliers and relationships with customers for
ISO 9000 registered organization), there is strong support (correlation coefcient = +0.790, p-value less than 0.01). This shows that
organizations with strong relationships with customers have similarly strong relationships with their suppliers. The converse also
applies. This inter-correlation also suggests that the two exogenous
constructs have a collective effect on the endogenous constructs in
the model.
The strong inter-relationship can be explained in terms of capabilities and resources of organizations. Notwithstanding our nding
that ISO 9000 based customer-related aspects could be ineffectual,
the capabilities that are probably required to develop close rela-
tionships with one stakeholder group would be similar for other

stakeholder groups. Similarly, if an organization has resources to
invest in developing relationships with customers, on balance, it
would do the same with suppliers.
While insights can be drawn from examining individual hypothesized relationships, collective evaluation of all the relationships in
the theoretical model can provide additional, deeper insights. The
effects analysis presented in Table 6 is instructive for this purpose.
Table 6 shows that the indirect effects of both task environment
constructs are positive in sign and moderate to large in magnitude.
The total effects of the two constructs on operating performance
are very similar (0.629 and 0.696 for relationships with customers
and relationships with suppliers respectively). As such, it is evident
that the task environment constructs act through each other. If they
are considered in isolation (as has been done in the section above),
their full impact would have been severely underestimated. This
is so for both relationships with customers and relationships with
suppliers. The results show that the direct and immediate impact on
operating performance is relatively weak, leading us to tentatively
conclude that these aspects of the standard are not particularly well
developed and specied, and could be relatively difcult for organizations to implement well. However, when the sum total of all the
indirect effects are considered, it is evident that both customer- and
supplier-related aspects make a strong and positive contribution to
operating performance.
5.2. Implications for theory
Researchers have used different theoretical lenses to understand the motivations, processes, contexts and aspirations of
organizations that register to standards such as ISO 9000. These
include: critical theory (Boiral, 2003); agency theory (Adams,
1999); institutional and organizational learning theories (Naveh
et al., 2004); neo-institutional and social network theories (Guler
et al., 2002); innovation adoption, diffusion and implementation
theories (Naveh and Marcus, 2004, 2005); and, technology coherence theory (Benner and Veloso, 2008). All of these theories provide
rich insights into the phenomenon, but by themselves and in
isolation, they do not provide a complete picture. In particular,
each of these theories does not account for substantial enough
proportions of variance in effectiveness of the standard, suggesting that there is scope for examination using other theoretical
perspectives.
In this paper, we provide a more comprehensive theoretical
basis for the dual functionality of ISO 9000 that could account
for its widespread registration. To our knowledge, RDT has not
been used before to explain the popular registration and operation of the ISO 9000 standard. Specically, we have shown that
RDT is a useful theory to understand the organizationenvironment
boundary spanning aspects of the standard. In essence, RDT predicts that organizations act in ways that would enable them to
acquire resources from their stakeholders present in their environment. From our ndings, we propose that ISO 9000 is a useful
facilitative instrument for resource acquisition, control of relationships with trading partners, boundary spanning, and for building
adaptive capabilities. As such, we have contributed a more rigorous
theoretical perspective towards the understanding of the standard.
Together with the theories listed above, a rich tapestry of insights
into the standard is emerging, which leads to a more holistic and
integrated understanding into this popular phenomenon.
In applying RDT to the ISO 9000 context, two contributions to
RDT have been made. First, we have shown that this theory can
be successfully applied to a new context, thereby demonstrating a
new domain of application. Here, we have addressed the call made
by Pfeffer (2005) that RDT (like other theories) needs continued
invocation for it to remain relevant. Second, we have improved the
resolution of the theorys application. RDT is generally silent on specic tools and methods that organizations can use for their resource
acquisitions purposes, with previous empirical studies focusing on
macro-level actions such as mergers and acquisitions (Finkelstein,
1997) and strategic alliances (Gulati and Gargiulo, 1999). This has
been a source of frustration for some (Barringer and Harrison, 2000;
Pfeffer, 2005). In this study, we have shown that RDT can be applied
to explain a management tool that operates at a micro-level. In
doing so, we have shown that RDT can be invoked at a fairly base
operational level. We have shown that RDT can be used to analyze
reasonably ne-grained phenomena.
5.3. Implications for practice
Our results suggest that managers must be careful when evaluating the utility value of the standard. If managers evaluate ISO 9000
on its direct and immediate impact on bottom line performance,
then the standard could be considered as being ineffectual. Our
results show that the impact of internal organizational processes
that are based on ISO 9000 principles on operating performance is
not signicant. Likewise, the customer and, to some extent, supplier
relationship aspects of the standard do not signicantly impact
operating performance. If managers view these in isolation, they
could conclude that the standard is not all that useful, and decide
to discontinue their registration status. In plants where registration is being considered, they may even decide to stop the process.
We recommend that managers adopt a more holistic, integrated
perspective of the standard. The effects analysis (Table 6) indicates
that different elements of the standard work through indirect pathways. Thus, managers should view the standard as a total package,
with some parts that are strong and others that play supporting
roles. When a holistic and integrated view is taken, the consequent
benets in improvements to operating performance will become
more apparent.
At the detailed level of application, our results show that the
standard can enable organizations to develop procedures for stable
internal processes as well as better coordination with customers
and suppliers. As such, the standard can be regarded as robust and
proven pre-packaged tool that relieves managers from creating and
implementing these processes and systems from scratch.
6. Conclusions and future research
This study attempts to provide a stronger theoretical basis for
the registration and operation of the ISO 900 standard. As the standard focuses on internal processes and coordination with external
stakeholders, we invoked RDT to explain the dual function of the
standard. Our model and results suggest that RDT presents an
appropriate organizationenvironment boundary spanning perspective of how the standard operates. Similar to that in Sroufe
and Curkivoc (2008), our results suggest that ISO 9000 is a tool
that organizations use for managing issues in their organizational
environment.
This study has several limitations that could be opportunities
for future research. First, this study is based on an empirical setting consisting of mostly micro and small Australian manufacturing
plants that are registered to the standard. Whilst it is possible to
generalize the ndings of this study to a greater population of Australian manufacturing companies, we are unable to establish if our
ndings can nd applicability in other countries, industries, and
organization sizes. Future studies could take a wider domain to
improve generalizability of the results. Second, perceptual measures were used for all variables. Whilst strong justications for
this approach was provided, and a common methods test showed
that bias was unlikely to be present, nonetheless, objective perfor-
61
mance measures might provide fresh insights and interpretations.

Future studies could thus examine these types of measures. Third,
the effects of general business environmental conditions were not
assessed. Future studies could examine the moderating inuence
of general business environmental conditions (along with others)
on the effectiveness of the standard. Fourth, the study is based
on monadic data obtained from focal organizations. While this
is acceptable as the study sought to understand the actions and
behaviors of focal organizations, future studies could adopt a triadic
methodological stance whereby the external actions of the focal
organization would be externally validated, thus providing richer
insights. Fifth, the SEM goodness-of-t indices for the hypothesized
model, while suggesting adequate t, could be improved upon.
Future studies could attempt to improve measurement of constructs. Finally, the ISO has developed many other standards over
time. Some are quality management standards customized to the
needs of specic industry sectors (e.g., ISO/TS 16949:2002 for the
automotive industry), while others are structurally modeled on ISO
9000, but address other functional areas (e.g., ISO 14000 environmental systems standard). Future studies could examine these ISO
9000 variant standards and test the applicability of our ndings to
the larger standard set. The proposed future studies would address
the robustness of the ndings of the current study.
Appendix 1. Constructs and associated items2
(1) Internal processes
IOP1:
The quality assurance processes ensure that the organizations own
output requirements are consistently met
IOP2:
The actual manufactured products are checked against customer
orders before they are delivered
IOP3:
The equipment to carry out tests and inspections are available when
needed
IOP4:
Products and processes are inspected and/or tested
IOP5:
Processes that produce products that cannot be tested or inspected are
continuously monitored
IOP6:
Everyone is aware of what needs to be done with raw materials,
work-in-progress and nished products that fail inspections
IOP7:
The handling, storage, packaging and delivery methods help to
minimize quality-related problems
IOP8:
It is possible to identify clearly when a raw material, work-in-progress
or nished product has been inspected
It is possible to establish relevant details (such as parts suppliers, place
IOP9a :
and date of manufacture, persons-in-charge) of all nished products
(2) Relationships with customers
RC1:
The organization is aware of the requirements of its customers
RC2:
Processes and activities of the organization are designed to increase
customer satisfaction levels
RC3:
Misunderstandings between customers and the organization about
customer orders are rare
RC4:
All contracts are systematically reviewed before acceptance, even if
they are routine ones
a
The organization has systematic processes for handling complaints
RC5 :
Changes made to contracts lead to confusion in the organization
RC6a :
(reverse coded)
(3) Relationships with suppliers
RS1:
The organization seeks assurance of quality from suppliers
RS2:
The main criterion for choosing suppliers is the quality of their products
RS3:
Misunderstandings between suppliers and the organization about
orders placed with them are rare
RS4:
The quality of supplied products and services are assessed
Materials provided by the customer for incorporation into products are
RS5a :
treated the same as materials from any other suppliers
(4) Operating performance
OP1:
Inventory levels
OP2:
Defective products rate
OP3:
Product reliability performance
OP4:
Total lead time of manufacturing products
OP5:
Delivery performance
a
Capacity utilization rates
OP6 :
OP7:
Wastage
a
These items were removed from the nal version of the constructs and not used
in the testing of the revised CFA and hypothesized models.
2
For items of constructs 1, 2 and 3, survey respondents were asked to express their
agreement with statements on a ve point scale, with 1 representing strongly agree
and 5 representing strongly disagree. For items of construct 4, survey respondents
were asked to express the satisfaction of the organizations with various measures
of performance using a ve point scale, with 1 representing very satisfactory and
5 representing very dissatisfactory.
62
Appendix 2. Inter-item Pearson correlation coefcients and descriptive statistics of items

Construct
Correlation coefcients
Internal processes
Operating performance
IOP1
IOP2
IOP3
IOP4
IOP5
IOP6
IOP7
IOP8
IOP9
RC1
RC2
RC3
RC4*
IOP1
IOP2
IOP3
IOP4
IOP5
IOP6
IOP7
IOP8
IOP9
RC1
RC2
RC3
RC4
RC5
RC6
RS1
RS2
RS3
RS4
RS5
OP1
OP2
OP3
OP4
OP5
OP6
OP7
1
0.359**
0.373**
0.267**
0.380**
0.491**
0.454**
0.365**
0.238**
0.242**
0.303**
0.280**
0.460**
0.237**
0.093
0.342**
0.278**
0.304**
0.337**
0.201**
0.237**
0.298**
0.298**
0.265**
0.297**
0.181**
0.246**
1
0.572**
0.412**
0.334**
0.388**
0.425**
0.302**
0.291**
0.291**
0.221**
0.275**
0.326**
0.184**
0.122*
0.239**
0.239**
0.267**
0.239**
0.105*
0.192**
0.179**
0.299**
0.255**
0.232**
0.185**
0.178**
1
0.422**
0.335**
0.428**
0.481**
0.402**
0.274**
0.191**
0.184**
0.161**
0.283**
0.251**
0.09
0.239**
0.234**
0.134**
0.274**
0.168**
0.188**
0.177**
0.297**
0.273**
0.282**
0.130**
0.179**
1
0.486**
0.298**
0.389**
0.351**
0.273**
0.161**
0.222**
0.176**
0.223**
0.282**
0.051
0.288**
0.111*
0.126*
0.263**
0.108*
0.193**
0.075
0.201**
0.130**
0.185**
0.091
0.111*
1
0.306**
0.300**
0.344**
0.200**
0.183**
0.375**
0.282**
0.374**
0.250**
0.123*
0.339**
0.234**
0.242**
0.295**
0.08
0.272**
0.179**
0.198**
0.167**
0.201**
0.094
0.174**
1
0.497**
0.358**
0.248**
0.273**
0.227**
0.235**
0.393**
0.156**
0.125*
0.353**
0.331**
0.263**
0.397**
0.240**
0.278**
0.232**
0.337**
0.223**
0.266**
0.201**
0.247**
1
0.320**
0.263**
0.319**
0.328**
0.330**
0.298**
0.183**
0.120*
0.305**
0.320**
0.326**
0.437**
0.246**
0.229**
0.278**
0.342**
0.280**
0.314**
0.164**
0.274**
1
0.443**
0.200**
0.200**
0.282**
0.265**
0.224**
0.092
0.325**
0.193**
0.231**
0.325**
0.169**
0.201**
0.232**
0.304**
0.172**
0.185**
0.046
0.223**
1
0.150**
0.205**
0.167**
0.166**
0.227**
0.07
0.132**
0.123*
0.181**
0.225**
0.118*
0.140**
0.229**
0.193**
0.179**
0.140**
0.059
0.172**
1
0.500**
0.351**
0.281**
0.235**
0.074
0.174**
0.290**
0.279**
0.288**
0.117*
0.204**
0.179**
0.254**
0.186**
0.233**
0.120*
0.235**
1
0.398**
0.260**
0.302**
0.124*
0.253**
0.303**
0.290**
0.305**
0.129**
0.236**
0.237**
0.258**
0.224**
0.299**
0.139**
0.227**
1
0.352**
0.305**
0.224**
0.177**
0.278**
0.445**
0.286**
0.135**
0.189**
0.299**
0.309**
0.213**
0.291**
0.045
0.197**
1
0.212**
0.230**
0.376**
0.230**
0.314**
0.280**
0.123*
0.139**
0.278**
0.274**
0.145**
0.160**
0.099*
0.208**
2.12
0.701
0.715
1.221
1.86
0.631
0.694
1.818
1.76
0.582
0.606
2.733
1.76
0.594
0.827
3.951
2.15
0.798
0.775
1.059
1.91
0.639
0.690
1.707
1.84
0.599
0.550
2.216
1.95
0.759
0.987
1.744
1.96
0.781
0.899
1.271
1.72
0.614
0.634
1.319
2.06
0.783
0.896
1.381
2.17
0.888
1.158
3.411
2.16
0.831
0.876
0.923
Descriptive statistics
Mean
Std. dev.
Skewness
Kurtosis
RC5
1
0.032
0.123*
0.036
0.095
0.233**
0.126*
0.056
0.06
0.106*
0.064
0.193**
0.054
0.063
RC6
RS1
RS2
RS3
RS4
RS5
OP1
OP2
OP3
OP4
OP5
OP6
OP7
1
0.108*
0.012
0.198**
0.133**
-0.016
0.066
0.161**
0.140**
0.063
0.079
0.002
0.190**
1
0.318**
0.233**
0.485**
0.176**
0.109*
0.172**
0.220**
0.174**
0.221**
0.043
0.141**
1
0.198**
0.361**
0.163**
0.231**
0.248**
0.246**
0.241**
0.263**
0.205**
0.243**
1
0.318**
0.247**
0.196**
0.341**
0.325**
0.257**
0.181**
0.119*
0.296**
1
0.254**
0.214**
0.303**
0.336**
0.282**
0.323**
0.101*
0.263**
1
0.135**
0.153**
0.248**
0.057
0.037
0.121*
0.158**
1
0.260**
0.281**
0.352**
0.352**
0.306**
0.334**
1
0.554**
0.375**
0.255**
0.184**
0.487**
1
0.352**
0.333**
0.186**
0.385**
1
0.489**
0.283**
0.357**
1
0.305**
0.278**
1
0.339**
1.74
0.684
0.864
0.942
2.54
0.996
0.476
0.353
1.89
0.748
0.804
1.047
2.25
0.994
0.666
0.05
2.25
0.775
0.88
1.212
1.87
0.666
0.837
2.151
2.18
0.921
0.857
0.554
2.34
0.860
0.778
0.077
2.21
0.871
0.79
0.688
1.82
0.587
0.414
1.375
2.21
0.823
0.761
0.505
2.06
0.798
0.916
1.145
2.48
0.875
0.547
0.138
2.46
0.883
0.534
0.126
Correlation is signicant at the 0.05 level (2-tailed).
**
Correlation is signicant at the 0.01 level (2-tailed).
Item
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A Resource Dependence Theory Perspective of ISO 9000

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Journal of Operations Management 29 (2011) 4964

Contents lists available at ScienceDirect

Journal of Operations Management

A resource dependence theory perspective of ISO 9000 in managing

These studies suggest that the standard plays a dual role in

P.J. Singh et al. / Journal of Operations Management 29 (2011) 4964

development of a model based on the identied theory; and (3)

Partly as a reaction to this, several researchers have sought to

P.J. Singh et al. / Journal of Operations Management 29 (2011) 4964

2.2. Organizational environment, resource dependence theory

First, RDT proposes that organizations that lack essential

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tions do derive greater benets from the standard. For example,

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Fig. 1. Theoretical model.

ments and availability, and the propensity to adapt. In the following

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tion and fulllment strategies. The ISO 9000 standard incorporates

gruence in facilitating dealings with multiple trading partners

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Food, beverage and tobacco

$A10 million in annual revenue. Fifty seven percent were registered

3.3. Data analysis procedure

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ISO 9000 requires organizations to ensure that: the quality

Tummala and Tang (1996), Johnson (1997),

Relationships with customers

Relationships with suppliers

icant multivariate outliers. Missing data, which averaged about 3%

Carr et al. (1997), Johnson (1997), Hoyle

Venkatraman and Ramanujam (1986),

et al., 2006; Schreiber et al., 2006). As for other measures of t, Hu

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Chi-square difference and p-value for CFA models,

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3.4.7. Nomological validity

3.4.8. Criterion-related validity

3.4.9. Common methods bias

4.1. SEM results for theoretical model

P.J. Singh et al. / Journal of Operations Management 29 (2011) 4964

lack of direct relationship can be explained by the limited range

For H2a (the extent to which customer relationships are based on

Endogenous construct: internal processes

Endogenous construct: operating performance

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practices need to be instituted to realize full customer-related

tionships with one stakeholder group would be similar for other

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mance measures might provide fresh insights and interpretations.

Appendix 2. Inter-item Pearson correlation coefcients and descriptive statistics of items

Relationships with customers

Correlation is signicant at the 0.05 level (2-tailed).

Correlation is signicant at the 0.01 level (2-tailed).

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Relationships with suppliers

P.J. Singh et al. / Journal of Operations Management 29 (2011) 4964

P.J. Singh et al. / Journal of Operations Management 29 (2011) 4964

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