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Journal of Operations Management

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Prakash J. Singh
a b
A resource dependence theory perspective of ISO 9000 in managing organizational environment

a ,*
, Damien Power
, Sum Chee Chuong
Dep a rt me nt o f M an ag em en t & Ma r ket in g , Th e Un i v ers i ty o f M el bo u rn e, VI C 3 01 0 , Au st ra l ia D epa r tm en t of De c i si o n Sc i en c es , N U S B u s i n ess Sc h oo l , Na ti o n al Un i ver s i ty o f S i ng ap o re, S i ng ap o re
article info
Art i c le h i s tor y : Rece i v ed 13 Jan ua r y 2 0 09 Rece i v ed i n r e vi s e d fo r m 31 Ma rc h 2 0 1 0 Acce p te d 1 3 Ap r i l 2 0 1 0 Av ai l a bl e onl i ne 2 1 Ap r i l 2 0 1 0 Keyw or d s: ISO 9 00 0 s ta nda r d Qu a l i ty mana ge ment Or g ani z ati o na l e nvi r o nme nt Res o u r ce d ep e nd enc e the or y
abstract
More than 900,000 organizations worldwide have registered to the ISO 9000 quality management standard. Despite itsgrowingpopularity,fewstudieshave offereda coherent theoreticalbasisforthe stan- appeal. A theory-based explanation enhances understanding and appreciation for the dards standard, and provides clarity on how the standard benefits 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 organizationalenvironment. It does this byspecifyingproceduresthat organizations need tomanage their organizationenvironment boundary spanning processes. Usingthe 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 manufacturing plants validated the RDT perspective, and suggest that the three Australian constructs, and in isolation, are not as effective as when they are considered together. By invoking individually RDT, theoretical viewpoint to ISO 9000 has been developed that adds to other theoretical a new perspectives, way to explaining the growingpopularity of this standard with organizations. and goes some 2010 ElsevierB.V. All rights reserved.
1. Introduction Since its inception, there has been a remarkable growth in organizations registering to theISO 9000 quality management standard, to 900,000 registered organizations in existence in with close 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 justifications, with the spotlight on how the standard assists organizations to intrinsically organizational performance ( processes and improve their internal Adams, 1999; Benner and Tushman, ).
These studies suggest that the standard plays a dual role in addressing both internal and external functions. A close examina-the standard confirms this duality: the standard tion of 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 theoret- Those that have (e.g., ical focus. 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, and partial understanding of ISO 9000 registration. fragmented 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) identification of a theory that integrates existing literature on the duality of ISO 9000; (2)
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 requirements, and to improve their locational advantage. and regulatory
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development of a model based on the identified 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 organization environmentrelationships 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 (1978) ronment to obtain resources. The basic assumptions of RDT are that organizations are rarely internally self-sufficient with respect to strategically important resources, thereby leading to dependencies on other organizations ( Heide, 1994 ); and organizations seek to reduceuncertainty and manage this dependency by carefully structuring their relationships with other organizations through formal and semiformal means ( Ulrich and Barney, 1984 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 thestandard 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 fit 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 theorybased 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 con- thereby demonstrating an additional application of text, thetheory. Pfeffer and Salancik
Partly as a reaction to this, several researchers have sought to explain registration from an external perspective. This research shown that some organizations register to comply stream has 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; Guleretal., 2002; Boiral, 2003; Clougherty and Grajek, 2008 ). Also, some organizations use the Terlaak and standard as a signal of their status to the market ( King, 2006 ). If these explanations (i.e., that organizations register for purely externally motivated reasons) are taken to their conclusion, then organizations are likely to make logical minimum levels of change to their internal processes and practices, just enough to achieve registration. As a consequence, significant improvements ininternal performance are unlikely to be detected. some organizations do seem to achieve discernible However, operating benefits through registration ( Carr et al., 1997; Terziovski et al., 2003; Corbett et al., ), and so externally driven explana2005 tions alone do not adequately account for anorganizations decision toregister. Further, implementationof the standard implies process mapping, and by extension, in many cases, changes to processes in order to achieve accreditation. Thereare, therefore, implications for altered internal processes even if motivation is purely externally driven. The limited number of studies that considered bothmotivations shows a general lack of convergence. Some studies show thatinternal motivations motivations. For example, are more important than external showed that the extent Naveh and Marcus (2004)
, RDT proposes that organizations engage with their envi-
).
Invoking RDT, we posit that ISO 9000 is a tool that organizations
to which ISO 9000 is associated with performance improvements depends more on the level of its assimilation with the existing internal processes combined withthe degreeto which an organization goes beyond the minimal requirements of the standard. They found that the extent to which the standards also implementation was externally coordinated with suppliers and customers was less important. Corbett et al. (2005) found that performance Similarly, improvements as aresult of registrationcould be attributed moreto productivity improvements than externally derived internal mar- benefits. keting Other studies showa more complex relationship betweeninternal and external motivations. For Naveh et al. (2004) example, showed that organizations that register early (first movers) do not necessarily gaina competitiveadvantage 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 efficiency), 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 followdifferentpathways, but generate similar outcomes. In a related Naveh and Marcus study, (2005) found that whileinstallationof ISO 9000 requires bothinternal 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 benefits 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 span). ning activities (see, for example, clause 5.2 Customer focus and Purchasing, ISO 9001:2000), we believe that this aspect needs 7.4 careful analysis as this perspective has the potential to provide insights into the standard that hitherto has not beencovered inthe literature .
2. Literature review 2.1. Why organizations register to ISO 9000 Despite widespread popularity of thestandard, 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 justifications, focus on external factors. Studies that are focused and others that 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 evidenceforthis perspectiveis not all that com- with many studies showing that ISO 9000 based internal pelling, management practices account for only modest levels of variance in operating and other measures of performance ( 1997; Simmons and White, 1999; Lima et al., 2000; Rahman, 2001 questions have been raised as to why an organization Further, would go through the effort and expense of formal registration if the motivation is limited improvements ( Terlaak and King, 2006 only ). to internal process Terziovski al., et
P .J . Si n gh e t al . / J ou r n al of Op er at i on s M a n age me nt 2 9 ( 2 01 1 ) 49 6 4 51
2.2. Organizational environment, resource dependence theory and ISO 9000 Researchers in strategic management and organization havetheory recognized the important role that organizational long environment plays in in uencing 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 com- of multiple task environments that are sources of posed general social, political, economic, demographic and technological trends ( Bourgeois, 1980 ). While task environment is within the realm of an organizations in uence, the general environment is usu- remote ally Doty et al., 2006 , p. 269) and cannot be in uenced ( easily by an organization. Researchers have identified complexity, dynamism and munificence 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 munifi- the extent to which an environment supports growth of cence is 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 organizational environment. These include transaction of the cost economics ( Coase, 1937; Williamson, 1975 Weick, 1979 ), institutional theory Porter, ), population ecology model ( DiMaggio and Powell, 1983 1980 ), cognitive model ( ( Hannan and Freeman, 1977 ( Pfeffer and Salancik, 1978 ), industry structure model ( ) and resource dependence theory ). Each of these models and theories
First, RDT proposes that organizations that lack essential resources to achieve their desired organizational outcomes will to establish relationships with others to obtain the seek 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 qualified suppliers and clause 4.1 deals with outsourced parties that organization has control the 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 specifies that the organization has to exert control over suppliers to ensure that purchased products from external sources conform to specifications. Clause 7.4.1 also states that supplier selection, evaluation and re-evaluation have to established in accordance to the organizations be requirements. Proper verification processes including inspection and supplier site verification have to be set up to ensure supply quality (Clause 7.4.3). Third, the relationships described by RDT are expressed as coali). tions being formed between trading partners largely with the aimmanaging uncertainty. RDT suggests that: ...organizations of seek to avoid dependencies and external control, and at the same time, increase stability and certainty in their own resource exchanges Salancik, 1978 ( Pfeffer and , p. 261). ISO 9000 provides these capabilities to organizations through the formalized frameworks that standards are built upon. A primary goal of the ISO 9000 stanISO dard is to reduce processes to a form that can be mapped, learned and replicated with a low level of variation. The incorporationinto the standard of specific clauses outlining how this may be achieved with trading partners is consistent with the objective of reducing variation at the inter-firm level. This objective can therefore be explained interms of RDT as being to reduce uncertainty inthe task environment through the building of trading partner coalitions. RDT conceptualizes the effects of environments onorgaFourth, nizations using external and internal perspectives ( Salancik, 1978 , p. 2). The external perspective relates to organizational effectiveness that pertains to the assessment of Pfeffer and
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 itPrescott, 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 . According to Pfeffer full exposition by Pfeffer and Salancik (1978)
the organizations output and activities by each of the various groups and participants (i.e., customers) ( Pfeffer and Salancik, 1978 2). On the other hand, the internal perspective is associated with organizational efficiency 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 efficiency 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. Specific customer relationship activities addressed in the standard include: fulfillment 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 com- (clause 7.2); proper treatment of customer property plaints (clause 7.5.4); and, guidelines on the monitoring and measurement of cusHandfield, ). tomer satisfaction (clause 8.2.1). Likewise, the management and improvement of internal processes in relation to resource acqui- are addressed in the standard in the following sition manner: stipulation that organizations should not only determine the pro- for the quality management system but also ensure cesses that resources are made available to support the operation, control and improvement of these processes (clause 4.1); affirmation of the importance of exercising control over outsourced processes
,p.
and Salancik, organizations depend onothers in their environment to ensure their ongoing viability. RDT predicts the for resources types of responses that organizations would exhibit depending on the level and nature of dependence they develop, and the rela-power of all players. It also provides guidance on how the tive 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. Inthe last 40 years, many different phenomena have been investigated using this theoretical lens, including several operations management concepts ( 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. Specifically, many of the key concepts, relationships and predictions thatRDT covers are directly relevant to the objectives and purposes of ISO 9000. This can be illustrated examples. with several
(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 internalcommunications (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 define and control the nature and limits of the relationship betweenan organization and players in its environment. The ISO 9000 standard could be viewed as one suchapparatus, 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 infor- defined by the nature of the resources being exchanged, mally but even long-term trading partners require some form of contractual the limits of their relationship. ISO 9000 performs this definition of role in defining 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 ...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 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 ineconomies where it has been established for long periods, that it has assumed the status of an order qualifier, or a basic condition be met in order to do business. that must Seventh, RDT propounds that organizations engage with their environment by adapting to it, changing the environment to suit circumstances (the enacted environment), or doing their 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 certification(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 collaborativeinto the standard has been the result of an acknowlframeworks edgement 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) environment through initiating change. As such, ISO 9000 the task 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 fit between the phenomenon under study (ISO 9000) and the theory chosen for analysis (RDT). 2.3. Effectiveness of ISO 9000 RDT defines 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, organizaSherer and that:
tions do derive greater benefits from the standard. For example, benefits from registration are accentuated when: the standard is assimilated within existing internal processes which then perform beyond minimal requirements of the standard ( 2004 ); learning from own and others Naveh and Marcus, experiences are
incorporated in the implementation process Naveh et al., 2004 ); and organiza( tions internalize the standard by using it in daily practice and as a catalystfor change ( Naveh and Marcus, 2005 ). These suggestthatto assess the effectivenessof ISO 9000, ameasurebeyond thesignaling effect of registration status is needed. Among typical measures of performance (such as financial, 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, performance, capacity utilization rates and wastage delivery 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 organizationis affected by the reliability of its suppliers (raw materials), operations (work-in-process inventories) and coordination with its customers (finished 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 insignificant differences in operational and financial performance between registered and non-registered organizations ( 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., ). In some cases, ISO 2005 9000 registration appears to affect certain types of performance. For example, registrationimproved operating performance, butnot business performance ( Naveh and Marcus, 2005 ). This led Corbett and Kirsch (2001, p. 328) mance. Likewise, to state that [t]here is little evidence on how ISO 9000 certification affects quality or business perforNavehand Marcus (2005, pp. 45) implementation of ISO 9000 should make an organizations operating performance go up, but consistent results that could verify proposition are not found in the this 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 defined in terms of three key constructs: internal processes, relationships with customers and relationships with suppliers. We treat the internal processes as being internal to the focal organization. For construct organizational environment, we focus only on the task environment as organizations are able to in uence this, and not the general environment which organizations are not able to directly in uence. The two constructs that deal with relationships with customers and suppliers are placed in the task environment to re ect important potential sources of resource linkages. Following the literature ( Handfield, 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 re ect the boundary spanning activities of organization. For assessing predictive validity and an 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 re ects boundary spanning activity, the filtering of resource the requirecommenttha t Terziovski
F ig . 1 . T heo re ti c al mo d el .
ments and availability, and the propensity to adapt. Inthe following sub-sections, we reappraise the standard and associated literature the elements and predicted relationships, and explain to identify in more detail the concepts and relationships hypothesized in 2.4.1. Internal processes The standard has a very strong focus on the internal processes of implementing organizations. Indeed, the philosophy underlying the standard is that organizations with solid much of operations and processes will be in the best position to in uence the quality of their products and services ( Withers et al., 1997 defines 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 benefit is the development of an effective sys- that assists in eliminating errors and thereby saves money tem that is otherwise spent on rework and scrap ( McAdam and McKeown, ). This Withers 1999 ). The standard requires thatall processes and procedures that affect quality be documented Kirchenstein and Blake, 1999 ( makes ISO 9000 a highly documentation oriented system ( et al., 1997; Hoyle, 1998; Naveh et al., 2004 ISO 9000 assists organizations to develop sound communication systems throughcarefully 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, con- and documented ( trolled Johnson, 1997; Anderson et al., 1999 these are donewell, then organizations would benefit from reduced error rates, scrap and rework. We therefore hypothesize that: H1. The extent to which internal processes are based onISO 9000 positively related to operating ). If ). The standard Fig. 1 .
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 ( 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 qualitymanagement system provides confidence 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 as a formal mechanism for dependencies to be can serve formed between an organization and its customers through creating legit- promoting stability of demand, and creation of imacy, resource based linkages (i.e., the supplying organizationbecomes a resource of choice). Further, thereis evidence that integrating internalprocesses 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 configure and specify product features ( OBrien, 2005 ); and the relationship between lead time reduction and the availability of unambiguous demand data De ( etal., 2004 ). At a practical level, clearly specified contracts allow ). As such, the the operations function effectiveproducto develop more efficient and Stewart and Treville Carr
). Taking this positively,
);
principles is performance.
2.4.2. Relationships with customers ISO 9000 recognizes the contemporary reality of understanding and meeting customer organizations to compete effectively ( preferences in order for Hoyle, 1998; Conti, 1999
tion and fulfillment strategies. The ISO 9000 standard incorporates many of these factors into requirements by defining customer relationships in terms of awareness of customer requirements, reduction in ambiguities related to specification of orders, and clarification of contract specifications and change management processes. As well, the standard defines relationships with customers not just in terms of the nature and content of interactions, but also in terms of specific processes and touch points in the organization to facilitate this relationship. These include processes for dealing with customer complaints and the promotion of greater satisfaction. In summary, we hypothesize that the ISO customer 9000 based relationships that organizations develop with theircustomers will impact their internal organizational processes, as well as operating performance. This is presented formally and with reference to H2a. Fig. 1 as: The extent to which customer relationships are based on ISO
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 ( 2007 ). Conversely, organizations that struggle with one type of stakeholder are expected to have similar difficulties 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 first 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. ISO 9000 certificates are predominantly issued at Since plantthe level, this level of analysis was chosen for this study. 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 classification code for the manufacturing sector starts with 2; plants falling in the 20002999 SIC range were targeted. An initial list of 1300 plants Juttner,
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 are based on ISO 9000 principles. processes 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 beneficial relationship enhances the ability of both to create value ISO 9004, 2000
Corbett
, p. 5). Relating ( to RDT, this statement clearly re ects the standard working as sociallegal apparatus Pfeffer and Salancik, 1978 , p. 2), facili( tating 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 proClements, 1993; Buttle, vides a minimum quality assurance system (
was compiled. After checking to ensure that large companies did have multiple plants included in the sample, a final not target sample size of 1053 plants was obtained. The survey was carried out in two waves. The first wave involved a mailout to the sample. This was followed up by a repeat mailout to nonwhole respondents a month later. The number of responses received was 418. Two of these had excessive missing data, and were excluded. The final 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 specific plant. To assess bias in terms of sample representativeness of the total population of manufacturing organizations, industry subdivisioncomparisons weremade. Table 1 shows that the proportion of organizations in the country, JAS-ANZ Register, the sampling frame and our sample are not significantly different in eight of ten sub-industry groups. Exceptions are the food, beverages the 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 sug- that the sample was likely to be free from significant bias, gest and reasonably representative of manufacturing organizations in the country. As Table 1 shows, plants from our sample were mainly from the and equipment(9%) provides the profile of the Table 2 metal products (26%)and machinery manufacturing industry sub-categories.
1997 ). It requires anorganization to selectsuppliers based ontheir ability to supply product in accordance with the organizations (clause 7.4.1, Purchasing process, ISO 9001:2000). requirements 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 stabil- many areas of an organizations operations. The function ity in 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, moreeffectivescheduling of operations and increased productivity. In sum, we hypothesize that the ISO 9000 based relationships that an organization develops with suppliers will impact internal orga- processes, as well as operating performance. Presenting nization this formally and with reference Fig. 1 : to 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 are based on ISO 9000 principles. processes Organizations that are able to develop sound relationships with suppliers are expected, on balance, to also be ableto 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 identification of concept of arcs of integration whereby organizations the 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-
participating plants. The participating plants were predominantly small plants with almost half having less than 100 employees and
P .J . Si n gh e t al . / J ou r n al of Op er at i on s M a n age me nt 2 9 ( 2 01 1 ) 49 6 4 55 T able 1 As s e ss m ent o f ex te nt o f b i as of s a mp l e b as e d o n i nd u s tr y s u b - cat eg or i e s o f the manu fa ctu r i ng o r ga ni za ti o ns . Manu f act u ri ng s ect or P r op o r ti o n o f m anu fa ctu r i ng o r ga ni zat i o ns i n th e co u ntr y i n 2 0 0 4 2 0 0 5 ( Au s t ra l i an Bu r eau o f St at i s ti cs , 2 0 0 6 ), N = 1 3 1, 1 8 3 ( %) Fo o d , b ev er ag e a nd t ob a cco 6 .5 9 10 8 Te x ti l e , cl o thi ng , fo o tw ea r a nd l e at her 1 1 .5 3 3 4 W oo d and p ap e r p r od u c t 7 .5 5 8 2 Pr i nt i ng, p u b l i s hi ng a nd re co rd e d m ed i a 1 1 .9 6 8 5 Pe tr o l eu m, co al , che mi ca l a nd a s s o ci at ed p ro d u ct 5 .9 1 5 13 6 N onme ta l l i c m i ner al p r od u ct 4 .3 1 0 9 2 Met al p r od u ct 1 6 .9 1 9 17 2 6 Mac hi ner y and e qu i p m ent 2 0 .2 3 0 26 9 Ot her manu f act u ri ng 1 5 .2 2 6 3 0 Mo re than o ne s ec to r 6 N o r es p o ns e 3 To t al manu f act u ri ng 1 0 0 1 0 0 1 00 1 0 1
a So me pl a nts p r o vi d e d a nu mb e r o f A NZ S IC co d es , i ndi c at i ng t hat t hey w er e e nga g ed i n s ev er a l ty p es o f ac ti v i ti e s. T he d e s cri p t i o ns of t hes e p l ant s we r e r ev i ew ed a nd the y w er e ca te go r i zed b as e d o n the i r ma i n m anu fa ctu r i ng a cti v i ty . b b
P r o p or t i on o f p l a nts l i s te d i n t he JA S- AN Z Reg i s te r ( 2 0 04 ) , N = 7 4 1 8 ( %)
Pr o p o rt i o n o f p l ant s i n s amp l e N = 1 0 5 3 ( %)
Ac tu al r es p o nd i ng p l ant s N = 4 1 6 ( %)
To t al ex ce ed s 10 0 d u e to ro u nd i ng e r ro r s .
$A10 millioninannual revenue. Fifty registered to the standard for less than 3 years.
seven
percentwere
3.3. Data analysis procedure Survey data of the type collected in this study can be analyzed using either exploratory or confirmatory approachesand Grover, 1998 ( Malhotra ). Given that our study involves testing pre-specified relationships between variables developed from theory-based expectations on howand why variables were related, the confirmatory 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 ( etal., 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 Third, SEM is able to simultaneously and comprehensively assess the entire setof relationships in amodel. which would benefit from simultaneous assessment. Fig. 1 has six relationships Fig. 1 . Hair
3.2. Constructs development and measurement issues Based on the reviewof the standards and related literature, sets of items were developed to measure the four constructs shown in Fig. 1 . Specifically, the internal processes construct was measured with nine items. The relationships with customers and relationships with suppliers constructs were measured with six and five 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. et al. (2005) Corbett , and Naveh and Marcus (2004) the difficulties of obtaining and using objective plant level data. In favor of perceptual measures, Venkatraman 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.
Besides testing the theoretical model, SEM was also used to test some of the psychometric properties of the constructs. We used the demonstrate and AMOS 5.0 softwarepackage, likelihood (ML) estimation technique.
and
utilized
the
maximum
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 in ated number of statistically significant parameters ( Muthen and Kaplan, 1985; Byrne, 1994 ate statistics mean, standard deviation, skewness and kurtosis ( Appendix 2 ) suggested that there were no significant deparChou and of . However, Mardias (1970) tures from normality based on thresholds suggested by ). All univari-
T able 2 De mo gr a p hi c c har act er i s ti c s o f p l ant s p a r ti ci p a ti ng i n the s tu d y . C har act er i s t i c N u mb e r Pl a nt s i ze Mi cr o to s m al l (l e s s t han 1 00 em pl o y ee s o r l es s tha n $ Au s 1 0 m i n r e ve nu e p .a .) Me d i u m t o l a r ge ( gr e ate r t han 1 0 0 e mp l oy e es or gr e ate r t han $ A u s 10 m i n re ve nu e p . a. ) Ti m e s i nce r eg i s tr at i o n t o s t and ar d Le s s t han 3 ye ar s 2 3 9 G re at er tha n 3 ye ar s 1 7 7 224 192
Bentler (1995)
coefficient multivariate kurtosis was 143, which is above the threshold value of 10 ( Oryand Mokhtarian, 2009 ), suggesting multivariatenonnormality. However, a number of studies have shown that ML is reasonably
robust to multivariate nonnormality Hu and Bentler, 1995; Ory ( Mokhtarian, 2009 and ). As such, the departure from multivariate normality was not regarded as a serious issue inour analysis. As for outliers, since all variables were measured on a five-point Likert the dataset was carefully reviewed to ensure that there scale, were no data-entry related errors present. Also, Mahalanobis d-squared distance measures did not suggest that any of the cases weresignif-
5 6 P . J . Si n gh et al . / J ou r n al of Op er a ti on s M a n ag em en t 29 (2 01 1 ) 4 9 6 4 T abl e 3 ISO 9 0 00 k ey ma nag em ent p r ac ti ce a nd p e r for ma nce co ns t ru ct s . C o ns tr u cts D es c ri p t i on o f co ns tr u ct s Su p p o rt i ng l i t er at u re Inte r nal p ro ce s s es IS O 9 0 0 0 r eq u i r es o r ga ni zat i o ns t o e ns ur e t hat : the q u a l i ty a s s u ra nce p r oc es s e s me et c u s to mer r eq u i r eme nts ; p r o d u cts a re check e d a ga i ns t or d e rs b efo r e d e l i ve ry ; eq u i p me nt t o t es t /i ns p ec t p ro d u ct s /p r oc es s e s a re a va i l ab l e ; p r o d u cts / p ro ce s s es ar e r eg u l ar l y t es t ed /i ns p e cte d ; p ro d u ct s t hat ca nno t b e te s te d a re co nti nu o u s l y mo ni to r ed ; e ve r yo ne i n t he o rg ani z at i on i s aw ar e o f wha t hap p e ns t o p r o d u cts tha t fa i l i ns p e cti o ns ; and , h and l i ng/ s to r ag e/ d el i v er y me tho d s m i ni mi ze q u a l it y -r e l ate d pr o b l ems Rel a ti o ns hi p s wi t h cu s to me rs IS O 9 0 0 0 r eg i s te r ed or g ani za ti o ns : a re a w ar e o f c u s to mer r eq u i r em ent s ; hav e p ro ce s s es / act i vi t i es tha t ar e d e s i gne d t o i ncr e as e cu s t o mer sa ti s f act i on; ha ve s ys t ems to av o i d mi s u nd e rs t and i ng s ab o u t cu s to me r o r de r s ; s ys t ema ti ca l l y r ev i ew co ntr ac ts ; and ha ve s y s te mat i c p ro ce s s es fo r ha nd l i ng co mp l a i nts Rel a ti o ns hi p s wi t h su p p l i e r s T he s u p p l i er - r el at ed i s s u es t hat a re r e l ev ant t o IS O 9 0 0 0 a re : o r ga ni zat i o ns s e ek as s u r ance o f q u al i t y fr o m s u p pl i e r s ; s u p p l i e rs ar e cho s e n o n the b a s i s o f q u al i t y; t her e ar e mi ni m al mi s u nd e rs t and i ng s a b o ut or d er s p l ace d w i t h s u p p l i er s ; q u al i t y o f s u p p l i ed p ro d u ct s /s e rv i ce s a re a s s es s e d ; mat er i al s fr o m cu s t o mer s and s u p pl i e r s a re al l tr ea te d i n the s ame w ay ; an d, s u p p l i e rs tha t ar e s u b co ntr a cto r s a r e s u i te d t o t he ta s ks the y p e rf or m. O p er at i ng p er fo r manc e S om e o f t he me as u r es tha t i nd i cat e t hat a n o r ga ni za ti o ns o u tp u t s ha v e co ns i s ten t q u al i ty ar e s te ad y l ev el s o f: co s ts r el a ti ng to q u a l i ty of p r o d u cts ; d e fect i ve p ro d u ct r at es ; a nd , p r o d u ct p er fo r manc e and re l i ab i l i t y l ev el s . Venk a tr ama n a nd Rama nu jam (1 9 8 6 ) , Wi l l i a ms et a l . (1 9 9 5 ) , G u p ta a nd So mer s (1 9 9 6) , T er zi o v s ki et a l . ( 19 9 7 ) , Ta n e t al . (1 9 9 8) , T er zi o v s ki et a l . ( 20 0 3 ) , Na ve h and Mar cu s (2 0 0 4) and Na v eh et a l . (2 0 0 4 ) C ar r e t al . ( 1 99 7 ) , Jo hns on (1 9 9 7 ) , H o y l e (1 9 98 ) , C o nti (1 9 9 9 ) , IS O 9 0 0 1 ( 2 00 0 ) , C l au s e 7. 2 , C o ntr ac t re vi e w p r o ces s , C l au s e 4 .3 ( a) , cu s to me r fo cu s ; Ka ra p et ro v i c and W i l l bo r n (2 0 01 ) , T er zi o v sk i et a l . ( 20 0 3 ) and N av eh e t al . (2 0 04 ) C l eme nts (1 9 9 3 ) , Bu t tl e ( 1 99 7 ) , H oy l e ( 19 9 8 ), ISO 9 0 0 1 ( 2 0 00 ) , C l au s e 7 . 4 .1 , P u r chas i ng pr o ce s s Tu mm al a and T ang ( 1 9 96 ) , Jo hns o n ( 19 9 7 ) , Wi t her s et a l . (1 9 9 7 ) , A nd er s o n e t al . (1 9 9 9) , C ont i ( 1 9 99 ) , McA d am and McK eo wn ( 19 9 9 ) Na ve h and Er e z (2 0 0 4) (2 0 05 ) a nd Na ve h and Mar cu s ,
icant multivariate outliers. Missing data, which averaged about 3% variable, were replaced with values estimated by the per expectation maximization algorithm as this procedure does not introduce et al., 2006 bias ( Hair ). 3.4.2. Confirmatory Factor Analysis Confirmatory 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 items had standardized factor loadings that were that five smaller than 0.5 (IOP9, RC5, RC6, RS5 and OP6 in Appendix 1 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 five items. CFA was performed again without the five items. As in typical SEM analyses, a number of commonly reported indices were obtained to assess the goodness-of-fit of models with data. For our revised CFA model, these fit indices were as follows:
2 (d f= 20 3 )
et al., 2006; Schreiber et al., ). As for other measures of fit, 2006 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 fit. If these cut-off criteria are applied to our CFA model results, we would conclude that fit is good for RMR and RMSEA, but poor for GFI, AGFI, TLIand CFI. However, the conventional cut-off criteria are considered to be excessively stringent ( Schermelleh-Engel al., 2003; Marsh et al., 2004; Sharma et al., 2005; Hair et al., 2006 Less stringent cut-off criteria where factors such as model com). This meant plexity, sample size and number of observed variables are taken into account have been proposed by Sharma et al. (2005) et al. (2006) . For example, Sharma et al. (2005, pp. 941942) gest that for datasets similar to ours, more liberal cut-off values (e.g., 0.8)should be used for normed fit indices such as GFI and TLI. Applying these criteria to our revised CFA model, we believe that, overall, an adequate level of fit has been obtained. Our results and fit assessment is similar to many studies in theoperations management area Tan, 2001; Frohlich, 2002; Hult et al., 2002; Douglas
2
Hu
et ).
and
Hair sug-
= 607 with p-value = 0.000;
/df =2.989;
( and Fredendall, 2004
goodness-of-fit index (GFI)= 0.880; adjusted goodness-of-fit index (AGFI)= 0.850; TuckerLewis index (TLI) =0.836; comparative fit 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-fit. Bollen and Long (1993) and others have proposed a graduated list of terms to describe model-data fit. Theseinclude: perfect, strong, acceptable, adequate, marginal, weak, mediocre, poor and no fit. To decide how well the model fits the data, the general recommendations are that the pvalue 2 statistic should be greater than 0.05; GFI, AGFI, associated with 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 to produce negative results with sample sizes greaterthan200, and so was disregarded since our sample size was 416. The value for
2 2
). For example, Hult et al. declared moderate but acceptable model fit (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 sufficient levels of face validity. 3.4.4. Multicollinearity Pearson correlationcoefficients areshown in Appendix 2 betweenthe 22 items
statistic p-value is
0.000, suggesting poor fit. However, this fit measure has a tendency
/df of 2.989 suggests acceptable fit, this being belowthe convenSchermelleh-Engel et al., 2003; Hair
tional threshold value of 3.0 (
. If inter-item correlations are greater than 0.9, the possibility that multicollinearity (i.e., the two items are essentially
P .J . Si n gh e t al . / J ou r n al of Op er at i on s M a n age me nt 2 9 ( 2 01 1 ) 49 6 4 57 T able 4 Su mma r y o f re l i ab i l i ty and co nve r ge nt va l i d i ty t es t s . C ons t r u ct N u mb er of i t ems C ro nb a chs al p ha re l i ab i l i t y co effi ci ent 1 . Inte r nal p ro ce s s es 8 0 .8 2 9 0. 8 3 5 0 . 89 4 0 .9 1 1 2 . Rel a ti o ns hi p s wi t h c u s to mer s 4 0 .6 7 9 0. 6 9 4 0 . 95 4 0 .9 6 1 3 . Rel a ti o ns hi p s wi t h s u p p l i e rs 4 0 .6 5 5 0. 6 6 8 0 . 91 7 0 .9 2 3 4 . O pe r at i ng p er fo r mance 6 0 .7 6 7 0. 7 7 4 0 . 87 0 0 .8 8 2 C o ns t ru c t r e l i ab i l i ty c oe ffici e nt N o r med fit i nd e x ( N FI) N o n-no r med fit i nd ex (N N FI)
measuring the same entity)exists is high ( of the correlation coefficients multicollinearityto be present. does not appear 3.4.5. Reliability is greater than
Hair et al., 2006 0.9,
). As none
cantly highly on others. Inour 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 second method for assessing discriminant validity. The validity involved theexamination of chi-squaredifference betweenall pairs of constructs. Anderson and Gerbing (1988) suggesttesting two CFA
Two estimates of reliability were obtained alpha reliability coefficients ( Cronbach, 1951 ) and construct coefficients ( Hair et al., 2006 , p. 777) for all four constructs.
reliability Table 4 shows that
models for eachpair of constructs. The first model is where the correlation coefficient is constrained to 1.0, and the second is free to estimate. If the difference in chi-square values between these mod- significant, thenbothconstructs possess discriminantvalidity. els is 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 Larcker (1981) , if the AVE values for both constructs that make up the pair are higherthanthe shared variance, then this indicates that constructs account for a greaterproportionof the variances these of the items that areassigned 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 coefficients. It would that according to this measure, the items do not appear 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 modification indices to see if there were any suggested relationships for improving model-data fit. However, as none of the suggested modifications for improved model-data fit could be explained theoretically, no modification was implemented. two methods provide evidence for discriminant The first 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 , on balthat one of the four methods for testing discriminant validity did provide positive support. Similar to not Shi et al. (2009) ance, since two of the three tests were positive, we conclude constructs have reasonable levels of discriminant that the validities. Furthermore, we have interpreted the results of our study cautiously. Fornell and
the coefficients range from 0.655 to 0.835. These exceed the min- threshold level of 0.6 for acceptable reliability for imum newly developed constructs ( Nunnally, 1978 ). Therefore, items reliably constructs. estimated the selected
the
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 onconstructs. All of standardized loadings were greater than 0.5, statistically the significant(at p-values <0.001) and positive in sign. Another assessment of convergent validity was obtained through SEM goodness-of-fit measures called the normed fit index (NFI) and non-normed fit index (NNFI) ( Ahire et al., 1996 struct as a one-factor congeneric model ( indices measure the proportion of improvement of the fit overall fit of the theoretical model relative to a null model.that the NFI ranged from 0.870 to 0.954 and for NNFI, from shows models were significantly better thantheir respective null models, suggesting adequate levels of convergent validity for all thereby of the constructs. Discriminant validity was tested in three separate ways. The first method involved inspection of correlations between the con- From the CFA model results shownin structs. 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 signifiT able 5 Res u l t s f or d i s cri m i nant v al i d i t y te s ts . C ons t r u ct P er cent ag e va r i ance ex t ra cte d Co ns t ru c t C o ns tr u ct 12341 2 3 4 1 . Inte r nal p ro ce s s es 3 8 .9 1 2 . Rel a ti o ns hi p s wi t h c u s to mer s 3 6 .7 0. 7 0 3 1 7 1 .1 (p =0) 3 . Rel a ti o ns hi p s wi t h s u p p l i e rs 3 3 .7 0. 7 8 8 0 .7 9 0 1 3 3 .7 (p = 0 ) 2 3 . 7 ( p = 0) 4 . O pe r at i ng p er fo r mance 3 6 .6 0. 6 1 6 0 .6 2 9 0 .6 9 6 1 2 1 4 .7 (p = 0 ) 10 5 . 5 ( p = 0 ) 6 5 .3 (p = 0) Co r r el a ti o n coe ffici e nt
) obtained from testing each conJoreskog, 1971
). These Table 4
0.882 to 0.961. These values suggest that the one-factor congeneric
C hi - s q u ar e d i ffe re nce a nd p - v al u e fo r C F A mo d el s , w i th co rr e l at i on b et we en co ns t ru ct s c ons t r ai ne d t o 1 .0 and fr ee l y e s ti ma te d
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 ( 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. 3.4.8. Criterion-related validity Criterion-related validityinvestigates the empiricalrelationship 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 difficult, with only three participating plants willing to provide suchdata. Criterion-related validity of the measurement items could not be established with certainty. 3.4.9. Common methods bias Since all items were measured using five-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 ( al., 2003 ), using a confirmatory 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-fit indices for this model indicating poor fit with data. The indices for Harmons one-factor congeneric model were: value = 0.000;
2 2 (d f= 20 9)
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 indicates that 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. 4. Results 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 2 models. These fit indices are as follows: value= 0.000;
2
(d f= 20 3 )
= 607 with p-
/df = 2.989; GFI = 0.880; AGFI =0.850; TLI =0. 836;

1
CFI =0.856; RMR= 0.032; and, RMSEA= 0.069. These indices suggest thatthe theoretical model has adequatelevel of empirical support. 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 multiplecorrelation, and correlationcoefficients). The haveseveral noteworthy aspects. In terms of the magnitude results and sign of the relationships, only two relationship ( are statistically insignificant in magnitude, having p-values greater than 0.05. All of the other relationships are statistically significant (p-values less than 0.05 or 0.1) and positive in sign, in magnitude 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. shows the standardized direct effects, indirect effects (calculated using the path analysis tracing rules described by 6669 Table 6 Kline, 2005, pp. that H1 and H2a )
Podsakoff et
= 904, p-
/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 (first-phase respondent n
1
= 236, second-phase n
= 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) ( 1998; Rigdonetal., 1998 Bollen, 1989; Joreskog, ), withthe groups being first-phase respon-
) and total effects of all the exogenous constructs on the endogenous constructs of the model. Table 6 indicates some of the direct effects are relatively small, the indirect while effects are of significant magnitude such that when the direct and indi-effects are added together, the total effect sizes in all cases rect are moderate to strong in magnitude and positive in sign. 5. Discussion 5.1. Significance of results obtained 5.1.1. Hypothesized relationships within theoretical model The results in Fig. 2 show that H1 (the extent internal processes are based on ISO 9000 principles is positively related to operating performance) is not supported. This relationship is weak (standardized regression coefficient= +0.139, p-value greater than 0.1). As such, we conclude that the internal organizational processes based ontheprescriptions within the standard are statistically insignificantpredictors of plantoperating performance. This
dents and second-phase respondents. In the first 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 significant change in fit whenall the parameters being in uenced by themoderatorwere constrained to be equal across the two groups. If asignificantreduction in fitoccurred, then this would suggestthatthe moderator was acting. The firststage MGA fit was: and the second stageMGA was in ationin
2 2 (d f=4 0 6) 2 ( df= 4 16 )
to
which
= 876, p-value =0.000;
= 892, p-value = 0.000. The
statistic is 16 with8 degrees of freedom, whichhas an
associated p-value of 0.042. Applyingthe conventional cut-off value of 0.05, this indicates that same pattern of measurement relationships existfor 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 inter- None of these reasons suggested that these organizations ested.
T o fu r the r co nfir m t hi s r e s u lt , a
d i ffe r ence te s t ca n b e u s ed w her eb y the
v al u e fo r the hy p ot hes i z ed mo d e l i s co mp ar e d to C F A mo d el ( And e r s on and G er b i ng, 1 9 8 8 ). H o w ev er , i n o u r ca s e, th e C F A a nd t he hyp o th es i ze d mo d el had the s ame nu m be r s o f p a ra met er s . H ence , thi s p e r fo rme d .
2
d i ff er enc e t es t co u l d no t b e m ea ni ngfu l l y
Fi g. 2 . T heo r et i ca l mo d el , s ho wi ng m ax i mu m l i k el i ho o d e s ti ma te s o f s t and a rd i z ed r e gr es s i o n c oe ffici e nts (o n s t ra i ght l i ne s s i ngl e - ar r ow hea d s ), s q u ar e d mu l ti p l e co r r el a ti o n co effi ci ent s ( on co ns t ru ct s ) and co r re l at i o n co e ffici e nts (o n cu rv e d l i ne s w i th d o u b l e- ar r ow he ad s ). 0 .0 5 < p- v al u e = 0 . 1 ; ** 0 . 01 < p -v al u e = 0 .0 5 ; * ** p - va l u e = 0 .0 1 .
lack of direct relationship can be explained by the limited range of benefits 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 Naveh and rates, (2004, 2005) Marcus 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 benefit 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 be regarded as, using Hills (2000) could terminology, an order qualifier rather than an order winner. Finally, there is doubt as to the to which internal processes that are based on ISO 9000 prinextent ciples can affect operating performance. Several studies show a non-significant relationship between ISO 9000 adoption and operating performance ( 1999; Lima et al., 2000 these studies.
T able 6 Ef fec ts d eco mp o s i ti o n of p a ths i n the hy p o the si z ed mo d el . Ex o ge no u s c ons t ru c t: D i r ec t eff ect Ind i re ct e ffe ct T o ta l e ffe ct
For H2a (the extentto which customer relationships are based on ISO 9000 principles is positively related to operating performance), the results show that this direct effect is not significant (standardized regression coefficient= +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 significant, but the strength of the relationship is moderate (stan- regression coefficient= +0.212, p-value between 0.05 and dardized 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 arenotsignificantlyeffectual ingenerating operating level performance improvements. This outcome is consistent with several studies example, et al. (1997) ). in the literature. For Rahman (2001) and Carr found that organizations without ISO 9000 registra-
tion 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 rather limited. In essence, the standard requires might be 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) (2008) and Sila (2007) suggest that improvement other quality
Terziovski et al., 1997; Simmons and White, Our result for ). H1 is similar to those in
, Yeung
End o g eno u s co ns tr u ct: i nt er na l p r o ces s e s Re l at i ons hi p s w i th cu s to me rs 0 . 2 12 0 .4 9 0 0 . 7 02 Re l at i ons hi p s w i th s u p p l i er s 0 . 6 20 0 .1 6 7 0 . 7 87 End o g eno u s co ns tr u ct: o p e ra ti ng p e r fo rma nce Re l at i ons hi p s w i th cu s to me rs 0 . 1 82 0 .4 4 7 0 . 6 29 Re l at i ons hi p s w i th s u p p l i er s 0 . 4 43 0 .2 5 3 0 . 6 96 Int er nal p r oc es s es 0 . 1 39 0 . 1 39
practices need to be instituted to realize full customerrelated benefits of the standard. It appears that the benefits of ISO 9000 are limited to being customer satisficing, 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 be the case in this study. Our study participants are all could from manufacturing sector, with the majority from the the machinery, equipment and metal working sub-sectors. Market concentration is low, and there are lots of suppliers with small in these sectors market shares. Combined with the fact that most of the plants study are micro, small or medium in size, it is likely in this that they are subjected to the exploitative behavior on their customers their economic dependence on them, as predicted part given 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 defined by the ISO 9000 standard) create a resource of value to the customer that may not be easily re ected in the operating performance of the organiza- creation of legitimacy, for example, may have value tion. The in eyes of the customer that may not be re ected in the operating performance. (the extent to which supplier relationships are based on ISO 9000 principles is positively related to operating performance) and H2d (the extent to which 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 supported (standardized regression coefficient= +0.443, p-value is between 0.01 and 0.05). Also supported is regression coefficient= +0.620, p-value less than 0.01). However, since the magnitude of the relationship H1 is not strong, the full in 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 seek quality inspection data from suppliers. From a RDT easily, e.g., 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 findings on the utility of the standard with respect to customers, and again may re ect ISO 9000 as an apparatus or platform for controlling relationships with suppli- for promoting stability. This result provides evidence ers, and to suggest that the standard plays an important boundary spanning role inpromoting 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 coefficient= +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 thatthe two exogenous constructs have a collective effect on the endogenous constructs in the model. The strong inter-relationship can be explained interms of capabilities and resources of organizations. Notwithstanding ourfinding that ISO 9000 based customer-related aspects could be ineffectual, the capabilities that are probably required to develop close relaH2d (standardized H2c supplier Hypotheses H2c
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 bedrawnfrom examining individual hypothesized relationships, collective evaluation of all the relationships in theoretical model can provide additional, deeper insights. the The effects analysis presented in Table 6 Table 6 is instructive for this purpose. shows that the indirect effects of both task environment
constructs are positive in signand moderate to large in magnitude. effects of the two constructs on operating The total performance (0.629 and 0.696 for relationships with customers are very similar and relationships with suppliers respectively). As such, itis evident thatthe task environmentconstructs actthrougheachother. If they are considered inisolation (as has been done in the section above), impact would have been severely underestimated. their full This is so for both relationships with customers and relationships with suppliers. The results show thatthe directand immediate impacton operating performance is relatively weak, leading us to tentativelythatthese aspects of the standard are not particularly conclude well developed and specified, and could be relatively difficult for organizations to implement well. However, when the sum total of all the indirect effects areconsidered, itis evidentthatbothcustomerand supplier-related aspects make astrong and positive contributionto 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 ( ( 1999 ); institutional and organizational learning theories ( et al., 2004 ); neo-institutional and social network theories (); et al., 2002 innovation adoption, diffusion and theories ( ence theory ( implementation Naveh and Marcus, 2004, 2005 Benner and Veloso, 2008 ); and, technology coher). Allof these theories provide Adams, Naveh Guler
rich insights into the phenomenon, but by themselves and in isolation, they do not provide a complete picture. In particular, theories does not account for substantial enough each of these 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. Specifically, we have shown that RDT is a useful theoryto understand theorganization environment 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 findings, we propose that ISO 9000 is a useful facilitative instrument for resource acquisition, control of relation- trading partners, boundary spanning, and for building ships with adaptive capabilities. As such, we have contributed amore rigorous theoretical perspective towards the understanding of the standard. Together with the theories listed above, a rich tapestry of insights standard is emerging, which leads to a more holistic into the 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 invocationfor it to remain relevant. Second, we have improved the
resolutionof thetheorys application. RDT is generallysilentonspecific tools and methods thatorganizations canusefor theirresourcepurposes, with previous empirical studies focusing on acquisitions macro-level actions such as mergers and acquisitions Finkelstein, ( 1997 ) and strategic alliances Gulati and Gargiulo, 1999 ). This has ( been asource of frustration for some ( Barringer and Harrison, 2000; Pfeffer, 2005 ). In this study, wehave shownthatRDT canbe 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 fine-grained phenomena.
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 in uence 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 adopta triadic methodological stance whereby the external actions of the focal organization would be externally validated, thus providing richer Fifth, theSEM goodness-of-fitindices for thehypothesized insights. model, while suggesting adequate fit, could be improved upon. studies could attempt to improve measurement of Future constructs. Finally, the ISO has developed many other standards over time. Some are quality management standards customized to the needs of specific 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 findings to the larger standard set. The proposed future studies would address the robustness of the findings of the current study. Appendix 1. Constructs and associated items
5.3. Implications practice
for
Our results suggest that managers must be careful when evaluatingthe utilityvalueof the standard. If managersevaluate 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 significant. Likewise, the customer and, to someextent, supplier relationship aspects of the standard do not significantly impact operating performance. If managers view these in isolation, they conclude that the standard is not all that useful, and could 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 ( that differentelements of the standard work throughindirect 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 improvements to operating performance will benefits in 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 provenpre-packaged tool that relieves managers from creating and implementing these processes and systems from scratch. Table 6 ) indicates
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 and Curkivoc (2008) that organizations organizational environment. use , our results suggest that ISO 9000 is a tool for managing issues in their Sroufe
( 1) I n ter n al p ro c es s es I O P1 : Th e qu al i ty as s u ran c e p ro c es s es e ns u re th at t he o rg an i zati o n s o wn ou tp u t r eq u i rem en ts ar e c o n si s te nt l y me I O P2 : Th e ac ttu al man u fac t ur ed p r od u c ts ar e c h ec ke d aga in s t c u st om er or de rs b efo re t he y are d el i ve red I O P3 : Th e eq ui p m en t to c ar ry o ut t es ts a nd in s p ec ti o ns ar e a vai l ab l e w he n ne ed ed I O P4 : Pr od u c ts an d p r oc es s es are i n s pe c ted a nd /o r te st ed P5 : Pr oc es s es th at pr o du c e pr o du c ts th at c an n ot b e t es ted or i n s pe c ted a IO re c on ti n u ou s ly m o ni t or ed I O P6 : Eve ry on e i s aw are o f w ha t n e eds to b e do n e w i th r aw m ate ri al s , wor k- i n -p ro gr es s an d fi n i s h ed p ro d uc t s th at fai l i ns p ec ti o n I O P7 : Th e ha s l i n g, s to rag e, p ac ka gi n g a nd de l iv er y me th od s h el p t nd o mi n i m iz e q u al i ty- r el ated pr o bl em I O P8 : It i s poss si b l e t o i de nt i fy c l ear ly w h en a ra w ma ter i al , wor k- i n -p ro gr es s or fi n i sh e d pr o du c t h as b een in s p ec te d I O P9 a : It i s po s si b l e t o es tab l i s h re l evan t d eta il s (s uc h as p ar ts s u p pl i er s , pl ac e an d d ate of m an u fac tu re , pe rs on s - in - c h arg e) of al l fi n i s he d p ro du c t s ( 2) R el ati o n sh i p s wi t h c u st om er s R C 1: Th e or gan i zat io n i s a war e of th e req u i re me nt s o f i ts c us to m er s C 2: Pr oc es s es an d ac ti v it i es o f t he o rg an i zati o n ar e d es i gn ed to i n c re as R e c us to m er s ati s fac t io n l ev el s R C 3: Mi s u n der s tan d i ng s b etw een cu s to m ers an d th e or ga ni za ti on abo ut c us to m er o rd er s ar e rar e R C 4: Al l c on t rac t s ar e sy st em ati c al l y r evi ew ed b efo re ac c e pt an c e, eve n i f th ey ar e r o ut in e o ne s a R C : Th e or gan i zat io n h as sy s tem ati c p ro c es se s fo r ha nd l i n g c om p la i a nt s 5 C : Ch an ge s m ad e to c on t rac t s l ead to c on fu s i on i n th e or gan i zat io R 6 n (re ver s e c o d ed ) ( 3) R el ati o n sh i p s wi t h s up p l i ers R S1 : Th e or gan i zat io n s ee ks a ss u ra nc e o f q u al i ty fr om s u p pl i er s R S2 : Th e m ai n c r i ter i on fo r c h oo si n g s up p l ie rs i s t he q ua l it y o f t he i r pr od u c ts : Mi s u n der s tan d i ng s b etw een su p pl i er s a nd th e o r gan i zati o n ab R S3 ou t or de rs p l ac e d wi th th em a re ra re R S4 : Th e qu al i ty o f s u p pl i ed pr od u c ts a nd se rv ic e s ar e as se ss e d a : Ma ter i al s p ro vi d ed b y th e c us t om er fo r i n co r po ra ti on in t o pr od u c ts a R S5 re tre ate d th e sa me as m ater i al s fr om an y oth er su p p li e rs ( 4) Op er ati n g p er for ma nc e O P1 : In v en to ry l ev el s P2 : Defe c ti ve p ro du c t s ra O te P3 : Pr od u c t r el i ab i l it y pe rfo rm an c O e P4 : To tal le ad ti m e of m an u fac tu ri n g p ro du c O ts O P5 : Del i ve ry p er for m an c e O P6 a : Ca pac i t y ut i li za ti on rat es O P7 : Was ta ge
a
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 findings of this study to a greater populationof Australian manufacturing companies, we are unable to establish if our findings can find applicability in other countries, industries, and organization sizes. Future studies could take a wider domain to improve generalizability of the results. Second, perceptual mea- were used for all variables. Whilst strong justifications for sures this approach was provided, and a common methods test showed that bias was unlikely to be present, nonetheless, objective perfor-
T hes e i t ems we r e r e mov e d fr o m t he fi nal v er s i o n o f the co ns tr u ct s and no t u s e d
i n the tes t i ng o f the r e vi s e d C F A and hyp o t hes i ze d m od e l s .
2 F or i te ms o f co ns tr u ct s 1 , 2 and 3 , s u rv ey r es p o nd ent s we r e a s ke d to ex p r es s t hei r a gr ee me nt w i th s t at eme nts on a fiv e p o i nt s cal e , w i t h 1 re p r es ent i ng s t ro ng l y ag re e
a nd 5 re p re s ent i ng st r ong l y d i s a gr ee . F o r i te ms o f co ns tr u ct 4 , s u r ve y r es p o nd ent s w er e as k ed to e xp r es s t he s a ti s fa cti o n o f the o rg ani z ati o ns w i th v ar i o u s mea s u re s o f p e rfo r man ce u s i ng a five p o i nt s cal e , w i t h 1 r ep r es e nti ng v e ry s at i s fact o ry a nd 5 re p r es e nti ng ve r y d i s s at i s fact o ry .
Appendix 2. Inter-item Pearson correlation coefficients and descriptive statistics of items

C o ns tr u c t I t em IO P1 I OP 2 I OP 3 I O P4 IO P5 I OP 6 I OP 7 I O P8 IO P9 R C1 R C 2 R C 3 R C4* C o rr el ati o n c o effi c i en ts I n te rn al pr oc e ss es I O P1 1 ** I O P2 0. 35 1 9 ** I O P3 0. 37 0. 57 2 3 ** I O P4 0. 26 0. 41 2 7 ** I O P5 0. 38 0. 33 4 0 ** I O P6 0. 49 0. 38 8 1 ** I O P7 0. 45 0. 42 5 4 ** I O P8 0. 36 0. 30 2 5 ** I O P9 0. 23 0. 29 1 8 ** R el at i on s hi p s w i th c u s to me rs R C 1 0. 0. 29 1 24 2 ** R C 2 0. 30 0. 22 1 3 ** R C 3 0. 28 0. 27 5 0 ** R C 4 0. 46 0. 32 6 0 ** R C 5 0. 23 0. 18 4 7 R C 6 0. 09 3 0. 12 2 ** R el at i on s hi p s w i th s u pp l i er s R S 1 0. 0. 23 9 34 2 ** R S 2 0. 27 0. 23 9 8 ** R S 3 0. 30 0. 26 7 4 ** R S 4 0. 33 0. 23 9 7 ** R S 5 0. 20 1 ** 0. 19 2 O P2 0. 29 8
** ** ** **
** ** ** ** ** ** ** ** ** ** ** ** * ** ** ** ** *
1 0 .4 22 0 .3 35 0 .4 28 0 .4 81 0 .4 02 0 .2 74 0 .1 91 0 .1 84 0 .1 61 0 .2 83 0 .2 51
** ** ** ** ** ** ** ** ** ** **
1 0 .4 8 6 0 .2 9 8 0 .3 8 9 0 .3 5 1 0 .2 7 3 0 .1 6 1 0 .2 2 2 0 .1 7 6 0 .2 2 3 0 .2 8 2
** ** ** ** ** ** ** ** ** **
1 0. 30 6 0. 30 0 0. 34 4 0. 20 0 0. 18 3 0. 37 5 0. 28 2 0. 37 4 0. 25 0 0. 33 9 0. 23 4 0. 24 2 0. 29 5
** ** ** ** ** ** ** ** ** *
1 0. 49 7 0. 35 8 0. 24 8 0. 27 3 0. 22 7 0. 23 5 0. 39 3 0. 15 6 0. 12 5 0. 35 3 0. 33 1 0. 26 3 0. 39 7 0. 27 8 0. 23 2
** ** ** ** ** ** ** ** ** ** ** ** * ** ** ** ** ** **
1 0 .3 20 0 .2 63 0 .3 19 0 .3 28 0 .3 30 0 .2 98 0 .1 83 0 .1 20 0 .3 05 0 .3 20 0 .3 26 0 .4 37
** ** ** ** ** ** ** * ** ** ** **
1 0 .4 43 0 .2 00 0 .2 00 0 .2 82 0 .2 65 0 .2 24
** ** ** ** ** **
1 0. 15 0 0. 20 5 0. 16 7 0. 16 6 0. 22 7
** ** ** ** **
1 0. 50 0 0. 35 1 0. 28 1 0. 23 5 0. 17 4 0. 29 0 0. 27 9 0. 28 8 0. 11 7 0. 20 4 0. 17 9
** ** ** ** ** ** ** **
1 0 .3 98 0 .2 60 0 .3 02 0 .2 53 0 .3 03 0 .2 90 0 .3 05
** ** ** *
1 0 .3 52 0 .3 05 0 .2 24 0 .1 77 0 .2 78 0 .4 45 0 .2 86 0 .1 35 0 .1 89 0 .2 99 0 .3 09 0 .2 13 0 .2 91 0 .1 97
** ** ** ** ** ** ** ** ** ** ** ** **
1 0 . 21 2 0 . 23 0 0 . 37 6 0 . 23 0 0 . 31 4 0 . 28 0
** ** ** ** ** **
0 .0 9 0 .0 51 0. 12 3 0 .2 39 ** 0 .2 8 8 0 .2 34 0 .1 34 0 .2 74 0 .1 68 0 .1 77
** ** ** ** ** ** ** ** **
** * * **
** ** ** **
0 .0 92 0. 07 0. 07 4 0 .1 24 0 .3 25 ** 0. 13 2 0 .1 93 0 .2 31 0 .3 25 0 .1 69 0 .2 01 0 .2 32 0 .3 04 0 .1 72 0 .1 85 0 .2 23
** ** ** ** **
** * ** **
** ** ** ** *
** ** ** **
0 .1 1 1 0 .1 2 6 0 .2 6 3 0 .1 9 3
0. 12 3 0. 18 1 0. 22 5
0. 08 0. 24 0 **
**
**
0. 29 9 0. 25 5 0. 23 2 0 .1 30 0. 17 8
0 .2 01 0 .1 3 0 0 .1 8 5 0 .1 1 1
** ** **
0. 33 7 0. 22 3 0. 26 6 0 .1 64 0. 24 7
** ** **
0. 25 4 0. 18 6 0. 23 3 0 .1 39 0. 23 5
O P6 0. 18 1 D es c ri p ti ve s ta ti s ti c s
** **
** ** **
** ** **
** ** **
S td . de v. 0. 70 1 0. 63 1 0 .5 82 0 .5 9 4 0. 79 8 0. 63 9 0 .5 99 0 .7 59 0. 78 1 0. 61 4 0 .7 83 0 .8 88 0 . 83 1 Ku r tos i s 1. 22 1 1. 81 8 2 .7 33 3 .9 5 1 1. 05 9 1. 70 7 2 .2 16 1 .7 4 4 1. 27 1 1. 31 9 1 .3 81 3 .4 11 0 . 92 3
1 0 .1 2 3
*
1
** **
0 .0 3 6 0. 01 2 0 .3 18 0 .2 3 3
*
0 .2 33 0 .4 85
** ** ** **
1 0. 31 8 0. 24 7 0. 19 6 0. 34 1 0. 32 5
** ** ** ** ** **
0 .0 5 6 0. 06 6 0 .1 09 0 .1 0 6 0 .1 9 3
-0 .0 16 0 .1 76
** **
1 0 .1 3 5 0 .1 5 3 0 .2 4 8
** ** ** **
0 .1 72 0 .2 20
** **
** **
1 0 .5 54 0 .3 75 0 .2 55 0 .1 84 0 .4 87
** ** ** **
0 .2 4 1 0 .2 6 3
**
0 .2 82 0 .3 23
*
1 0. 48 9 0. 28 3 0. 35 7
** **
0. 11 9 0. 29 6
**
0 .1 2 1 0 .1 5 8
**
**
1 0 .3 3 9
**
0 .1 41
**
1 .7 4 2. 54 1 .8 9 2 .2 5 2. 25 1 .8 7 2 .1 8 2. 34 2 .2 1 1 .8 2 2. 21 2 .0 6 2 .4 8 2. 46 0 .8 6 4 0. 47 6 0 .8 04 0 .6 6 6 0. 88 0 .8 37 0 .8 5 7 0. 77 8 0 .7 9 0 .4 1 4 0. 76 1 0 .9 16 0 .5 4 7 0. 53 4
C o r re l at i o n i s s i gni fi cant a t the 0. 0 5 l e ve l ( 2 -t ai l e d ).

**
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St r u ctu r al E q u at i on Mo d el i ng 11 (3 ) , 3 20 3 4 1 . McA d am, R., McK eo w n, M ., 1 99 9 . Li fe aft er IS O 9 0 0 0 : a n ana l ys i s o f t he i mp a ct of ISO 9 0 0 0 and t o tal qu a l i ty ma nag eme nt on s m al l b u s i nes s e s i n N o rt her n Ir e l and . T ot al Q u al i t y Mana ge me nt 1 0 ( 2) , 2 2 9 2 4 1 . Me re d i th, J ., 1 9 9 5 . W hat i s em p i ri ca l r e s ea rch? De ci s i o n Li ne 2 6 ( 2 ), 1 0 1 1. Mu t hen, B. , K ap l an, D. , 1 9 8 5 . A co mp a ri s o n o f so me met ho do l o g i es fo r t he fa cto r ana l y s is of no n-no r mal Li k er t v a ri a b le s . Bri t i s h Jo u r nal o f M at hema ti ca l & St at i s ti ca l P s y cho l og y 3 8 (2 ), 17 1 1 8 9. N av eh, E . , E re z, M ., 2 0 0 4 . Inno va ti o n a nd a tt ent i o n t o d et ai l i n the q u al i t y i mp r o ve me nt p ar ad i g m. Ma nag eme nt S ci ence 50 (1 1 ), 15 7 6 1 5 86 . N av eh, E . , Mar cu s , A. , 2 00 4 . W hen d o es t he ISO 9 0 0 0 q u a li t y as s u r anc e s tand a r d l ea d t o p er fo r mance i mp r o ve me nt? As s i mi l a ti o n a nd g o i ng be y ond . IE E E T ra ns act i o ns o n E ngi ne er i ng Ma nag eme nt 5 1 ( 3 ), 3 5 2 3 63 . N av eh, E ., Mar cu s , A. , 2 0 0 5 . A chi ev i ng com p et i ti v e a d va ntag e thr o u gh i mp l e ment i ng a r ep l i ca bl e m anag e ment s t and ar d : i ns ta l l i ng and u s i ng ISO 90 0 0 . Jo u r nal of O p er at i ons Ma nag eme nt 2 4 ( 1 ), 1 2 6 . N av eh, E . , Mar cu s , A. , H y ou ng , K. M., 2 0 0 4 . Imp l em ent i ng ISO 9 0 0 0 : p e r for ma nce i mp r ov e ment b y firs t and s eco nd mo v er s . Inte rna ti o nal Jou r na l o f P ro d u ct i on Res e ar ch 4 2 ( 9 ), 1 8 4 3 1 8 6 3 . N u nnal l y , J. C ., 1 9 7 8 . P s yc home tr i c T heo r y, 2 nd ed . McG ra w- H i l l , N e w Yo r k. O ry , D .T . , Mo k htar i a n, 2 00 9 . Mo d e l i ng the s t r u ctu r al r el a ti o ns hi p s a mo ng s ho rt d i s ta nce t ra ve l amo u nts , p er ce pt i o ns , af fec ti o ns , and d e s i re s . T ra ns p o rt at i on Res e ar ch P ar t A 4 3 , 2 6 4 3 . P au l r aj, A. , C hen, I. J., 2 0 0 7 . E nv i ro nme nta l u nce rt ai nt y and s t ra te gi c s u p p l y mana ge me nt: a r es o u r ce d ep e nd ence p er s p e cti v e and p e rf or ma nce i mp l i cat i o ns. T he Jo u rna l of S u p p l y C hai n Ma nag eme nt Su mm er , 2 9 42 . P fef fer , J. , 2 00 5 . D ev e l op i ng r e s ou r ce d e p end e nce the o ry : ho w the o ry i s af fec te d b y i ts e nvi r o nment . In: S mi th, K.G . , H i tt , M. A. ( E d s .) , Gr e at Mi nd s i n Mana g eme nt: T he P r o ces s o f The o ry D e ve l op me nt. O x fo rd Uni v er s i t y Pr es s , O x fo rd , U K, p p . 4 3 6 4 5 9 . P fef fer , J., S al a nci k , G . R., 1 9 7 8. T he E xt er nal C ont r ol o f O rg a ni zat i on s: A Res o u r ce D ep e nd ence P e rs p e cti v e. H ar p er & Ro w, N ew Yo r k . P od s a ko ff , P .M ., Mac Kenz i e, S. B., Le e, J.- Y. , P o d s ak o ff, N. P ., 2 0 03 . C o mmo n met ho d b i as e s i n b eh av i or al r es e ar ch: a cr it i ca l r e vi e w o f the l i te ra tu r e a nd r e co mme nde d re med i e s . Jo u r nal of A p p l i ed Ps y cho l o gy 88 (5 ) , 8 7 9 9 0 3 . P or t er , M .E . , 1 9 8 0 . C o mp e ti ti v e St ra te gy : T e chni q u es fo r Ana l yz i ng Ind u s t r i es a nd C o mp et i to r s . T he Fr ee P r es s , N e w Yo r k. P re s co tt , J. E. , 1 9 8 6 . E nvi r o nment s a s mod e r ato r s of t he r el a ti o ns hi p b e tw ee n s tr at eg y a nd p e rf or ma nce. Aca d emy of Ma nag eme nt Jo u r nal 2 9 (2 ) , 3 2 9 3 4 6 . Rahm an, S . , 2 0 01 . A co mp ar at i v e s tu d y of TQ M p r act i ce a nd o r g ani s at i o nal p er fo r manc e wi t h a nd w i tho u t IS O 9 0 0 0 ce rt i fica ti o n. Inte r nat io na l Jo u r nal of Q u al i t y and Re l ia b i l i ty M ana ge ment 1 8 (1 ) , 3 5 4 9 . Ri g d on, E .E . , Schu ma ck er , R.E . , W ot hke , W ., 1 9 9 8. A co mp a ra ti v e re vi e w o f i nt er act i o n a nd no nl i ne ar m od e l i ng. In: Schma ck er , R. E. , Ma r co ul i d e s , G .A . (E d s .) , Inte r act i on a nd N o nl i ne ar Ef fect s i n S tr u ct u ra l Eq u a ti o n Mo d el i ng . E r l ba u m, Ma hwa h, N J, p p . 1 1 6 . Ro s s et ti , C ., 2 0 0 8. S u p p l y m anag e ment u nd er hi g h g oa l i nco ngr u e nce: an e mp i r i cal ex am in ati o n o f d i s i nte rme d i at i o n i n t he a er o s p ace s u p p l y chai n . D e ci s i on Sc i ence s 3 9 (3 ), 50 7 5 4 0. Sc her mel l e h- Eng el , K ., Mo o s b ru g g er , H ., Mu l l e r, H . , 2 0 03 . E va l u at i ng the fit o f s t r u ctu r al eq u at i o n mo d el s : te s ts o f s i g ni fica nce a nd d es c ri p t i ve g oo d ne ss - o f- fit me as u r es . Me tho d s o f P s y cho l og i ca l Re s ea rc h O nl i ne 8 (2 ), 23 7 4 . Sc hre i b er , J. B., St ag e, F. K. , Ki ng , J. , N o r a, A. , Ba rl o w , E .A ., 2 00 6 . Rep o r ti ng s tr u ctu r al eq u a ti o n m od e l i ng and co nfirm at or y fa cto r a nal y s i s r es u l t s : a re vi e w . The Jo u r nal o f Ed u ca ti o na l Re s ea rc h 9 9 (6 ), 32 3 3 3 7. Sc hri e s hei m, C .A ., C o gl i s e r, C .C . , 2 0 0 9 . C o ns tr u ct va l i d at i on i n l e ad e rs hi p r es e ar ch: ex p l i ca ti o n a nd i l l us t r at i on. The L ea d er s hi p Q u a rt er l y 2 0 , 7 2 5 7 3 6 . Sha r fman, M. P. , De an Jr . , J. W ., 1 99 1 . C onc ep tu a l i zi ng and me as u r i ng the o r g ani za ti o na l env i ro nme nt: a mu l t i d i mens i o nal a p p r oa ch. J ou r nal o f M ana ge ment 1 7 (4 ) , 6 8 1 7 0 0 . Sha r ma, S ., Mu k her je e, S. , Ku ma r , A ., D i l l o n, W .R. , 2 00 5 . A s i mu l at i on s tu d y t o i nve s ti g at e the u s e o f cu t o ff va l u es f or a s s es s i ng mo d e l fit i n co v ar i anc e st r u ctu r e mo d el s . Jo u r nal o f Bu s i nes s Res e ar ch 5 8, 93 5 9 4 3.
S her e r, P . D. , Le e, K ., 2 0 0 2 . Ins ti t u ti o nal chang e i n l a r ge l a w fir ms : a re s ou r ce d e p end e ncy and i ns ti t u ti o nal p er s p ect i ve . Aca d emy o f Mana ge men t Jo u r nal 45 (1 ), 1 0 2 1 19 . S hi , G. , Shi , Y. -Z . , C ha n, A.K .K ., W ang , Y., 2 0 0 9. Re l at i ons hi p s tr eng th i n s er vi c e i nd u s t r i es : a me as u r eme nt mo d el . Inte rna ti o na l Jo u rna l o f Ma rk e t Re s ea rc h 5 1 (5 ), 6 5 9 6 85 . S i a, C . -L ., T eo , H .- H ., T an, B. , W e i , K .- K. , 20 0 4 . Ef fect s o f e nvi r o nmen tal u ncer ta i nty o n o r ga ni za ti o nal i nt ent i o n to a d op t d i s tr i b u te d w or k ar r ang eme nts . IE E E T r ans a cti o ns o n E ng i nee ri ng Mana ge ment 51 (3 ) , 2 53 2 6 7 . S i l a, I., 2 00 7 . E x ami n in g the ef fect s of cont ex t u al fac to r s o n T Q M and p er fo r mance t hr ou g h t he l ens o f o rg ani z at i ona l t heo r i es : an e mp i r i cal s tu d y . Jou r na l o f O p e ra ti o ns Mana ge ment 25 , 8 3 1 0 9 . S i mmo ns , B. L. , W hi te , M. A. , 1 9 9 9. The re l at i o ns hi p b e tw ee n ISO 90 0 0 and b u s i nes s p e r fo rma nce: d o es r e gi s t ra ti o n r ea l l y mat te r? Jo u r nal o f M anag e ri a l Is s u es X I ( 3 ), 3 3 0 34 3 . S r ou f e, R., C u r ki v o c, S ., 2 0 0 8. An e x ami na ti o n o f ISO 9 0 0 0 : 2 0 00 a nd s u p p l y c hai n q u a l i ty a s s u ra nce . Jo u rna l o f O p er at i o ns Ma nag em ent 2 6 (4 ), 5 0 3 5 2 0. S ta nd ar d s Au s t r al i a, 2 0 0 4 . Jo i nt Ac cre d i te d S ys t em- Au s t ra l i a and N e w Ze al a nd (JA SA N Z) R eg i s te r (D a te a cces s e d : O cto b er 2 00 4 ) ht tp :/ /w ww . jas - anz .co m. au . S te w ar t, T .A ., O Br i en , L ., 2 0 05 . E x ecu t i on wi t ho u t e x cu s es . H ar v ar d Bu s i nes s Rev i ew 8 3 (3 ), 10 2 1 1 1 . T a n, K. C . , 2 0 0 1. A s t ru c tu r al e q u ati o n mo d e l of ne w p ro d u ct d es i g n and d ev e l op me nt. D e ci s i on S ci ence s 32 (2 ) , 1 9 5 2 2 6 . T a n, K. C . , H an dfi el d , R.B. , K ra u s e, D .R. , 1 9 9 8 . E nha nci ng t he fir m s p er fo r mance t hr ou g h q u al i t y and s u p p l y b as e mana g eme nt: an e mp i r i cal s t u d y. Int er nat i o nal Jo u r nal o f Pr o d u cti o n Res e ar ch 3 6 ( 1 0) , 2 8 1 3 2 8 3 7 . T e rl a ak , A. , Ki ng , A. A. , 20 0 6 . T he eff ect o f cer ti fi cat i on w i th the IS O 9 00 0 qu a l i ty m anag em ent s ta nd ar d : a s i gna l i ng ap p r o ach. Jo u rna l o f E co no mi c Be hav i or & O r ga ni za ti o n 60 , 5 7 9 6 02 . T e rz i ov s k i , M ., P ow er , D ., So ha l , A ., 2 0 03 . T he l o ng i tu d i na l eff ect s o f t he IS O 90 0 0 c er ti fic ati o n p r oc es s o n b u s i ne s s p e r fo rma nce . E u ro p e an Jo u rna l of O p e ra ti o ns Re s ea r ch 1 4 6 , 5 8 0 5 9 5 . T e rz i ov s k i , M ., S ams o n, D. , D ow , D ., 1 9 9 7. T he b u s i nes s v al u e o f q u a l i ty ma nag em ent s y s te ms ce rt i fica ti o n: e vi d e nce fr o m Au s t ra l i a a nd N e w Z e al a nd . Jo u r nal o f O p er at i o ns Ma nag em ent 1 5 ( 1 ), 1 1 8 . T s i o tr as , G . , Go tz ama ni , K. , 1 9 9 6 . ISO 9 0 0 0 a s an ent r y ke y to T Q M: the ca s e of G re ek i nd u s t ry . Int er nat i on al Jo u r nal of Q u al i t y and Rel i a bi l i t y Ma nag eme nt 13 (4 ), 6476. T u mma l a, V .M. R. , Ta ng, C . L. , 1 9 96 . S tr at eg i c qu a l i ty m anag e ment , Mal co l m Bal d r i ge a nd E u ro p e an q u al i t y aw ar d s and IS O 9 00 0 ce rt i fica ti o n: c or e co ncep t s and co mp a ra ti v e a nal y s i s . Int er na ti o nal Jo u r nal o f Q u al i t y a nd Rel i a b i l i ty Mana ge ment 1 3 (4 ), 8 3 8 . T ze l ep i s , D ., T s ek o u ra s , K ., Sk u r as , D. , Di m ar a, E ., 2 00 6 . T he e ffe cts o f IS O 9 00 1 o n fi rms p r o d u cti v e effic i ency . Inte r nati o na l Jo u r nal o f Op e r ati o ns & P r o d u cti o n M anag e ment 2 6 (1 0 ), 1 1 4 6 11 6 5 . U l r i ch, D ., Bar ne y, J. B., 1 9 8 4. P er s p e cti v es i n o rg ani z at i ons : r es o u rc e d e p end e nce. E ffic i ency and Po p u l a ti o n. Ac ad em y o f M ana ge ment R ev i ew 9 (3 ) , 4 7 1 4 8 1 . U zu m er i , M .V ., 1 99 7 . ISO 9 0 0 0 and o the r met as t and a rd s : p ri nci p l e s fo r mana ge ment p r ac ti ce ? Ac ad em y o f Mana ge ment E x ec u ti v e 1 1 ( 1) , 2 1 36 . V enk at r ama n, N . , Ra manu ja m, V. , 1 9 8 6 . Me as u r em ent of bu s i ne s s p er fo r mance i n s tr a te gy re s ea rc h: a co mp ar i s o n o f ap p r o ache s . A cad e my o f Mana ge ment Re v i ew 1 1 (4 ), 8 01 8 1 5 . V i ck er y , S. K. , Jay ar a m, J. , D ro g e, C . , C a l anto ne , R. , 2 00 3 . T he e ffe cts o f an i nte gr at i ve s u p p l y chai n s tr a te gy on cu s t om er s er vi c e and fina nci al p er fo r manc e: a n a nal y s i s of d i r ec t and i nd i re ct r el a ti o ns hi p s . Jo u r nal o f Op e ra ti o ns Mana ge me nt 2 1, 5 2 3 5 39 . W a rd , P . , D u r ay , R., Le o ng, G ., S u m, C ., 1 9 9 5. Bu s i ne s s env i r onm ent , o p e ra ti o ns s t ra te gy , a nd p er fo r mance : an e mp i r i cal s tu d y o f Si ng ap o r e manu f act u re r s . Jo u r nal o f O p er at i o ns Ma nag em ent 1 3 , 9 9 11 5 . W a rd , P .T ., Du r a y, R., 20 0 0 . Ma nu fac tu r i ng s t ra te gy i n cont ex t : env i r onme nt, c omp e ti t i ve s t ra te gy a nd manu fa ct u ri ng s tr a te gy . Jou r na l of O p er at i ons Mana ge me nt 1 8, 12 3 1 3 8. W e i ck , K .E ., 1 9 7 9. T he S o ci al P s y cho l og y o f O rg ani z i ng. Ad d i s o n- W es l e y, Rea d i ng, M A. W i l l i a ms , F. , D S ou z a, D . , Ro se nfe l d t, M. , Ka s s ae e, M. , 1 9 95 . M anu fa ctu r i ng s t ra te gy , b u s i nes s s tr at eg y and fi rm p er fo r mance i n a m atu r e i nd u s tr y . Jo ur na l o f O p e ra ti o ns Mana ge ment 13 , 1 9 3 3 . W i l l i a ms o n, O .E ., 19 7 5 . Ma r ke ts and H i er ar chi e s . Fr e e Pr e s s , N ew Y or k . W i t her s , B.E . , E b r ahi mp o u r , M. , H i kme t, N . , 1 9 9 7 . A n ex p l o r ati o n o f the i mp act o f T Q M a nd JIT o n ISO 9 0 0 0 r eg i s te re d co mp a ni es . Int er nat i ona l Jo u r nal of P ro d u ct i o n E co no mi cs 53 (2 ) , 2 0 9 2 1 6 . Y eu ng , A. C .L. , 2 0 08 . S tr at eg i c s u p p ly mana ge ment , q u al i t y i ni ti a ti v es , a nd o rg an iz at i o nal p er fo r mance . Jo u r nal of O p er a ti o ns M ana ge ment 2 6 (4 ) , 4 90 5 0 2 .

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Contents lists available at

Journal of Operations Management

A resource dependence theory perspective of ISO 9000 in managing organizational environment

, Sum Chee Chuong

Dep a rt me nt o f M an ag em en t & Ma r ket in g , Th e Un i v ers i ty o f M el bo u rn e, VI C 3 01 0 , Au st ra l ia D epa r tm en t of De c i si o n Sc i en c es , N U S B u s i n ess Sc h oo l , Na ti o n al Un i ver s i ty o f S i ng ap o re, S i ng ap o re

* C o r r es p o nd i ng au t ho r. Te l .: + 6 1 3 8 34 4 4 71 3 ; fa x: + 6 1 3 9 3 49 4 2 93 . E -m a il ad d re ss : p js i ngh@ u ni mel b . ed u . au (P .J. Si ng h).

0 27 2 - 6 96 3 /$ s e e fr ont mat te r 2 01 0 E l s ev i er B. V. Al l ri g hts r es e rv ed . d oi : 1 0. 1 0 16 / j.jo m. 2 01 0 . 04 . 0 02

, RDT proposes that organizations engage with their envi-

Invoking RDT, we posit that ISO 9000 is a tool that organizations

). Taking this positively,

= 607 with p-value = 0.000;

( and Fredendall, 2004

tional threshold value of 3.0 (

Hair et al., 2006 0.9,

reliability Table 4 shows that

) obtained from testing each conJoreskog, 1971

0.882 to 0.961. These values suggest that the one-factor congeneric

C hi - s q u ar e d i ffe re nce a nd p - v al u e fo r C F A mo d el s , w i th co rr e l at i on b et we en co ns t ru ct s c ons t r ai ne d t o 1 .0 and fr ee l y e s ti ma te d

/df = 2.989; GFI = 0.880; AGFI =0.850; TLI =0. 836;

/df = 4.327; GFI= 0.815; AGFI = 0.776; TLI =0.727;

= 180). It was assumed that

= 876, p-value =0.000;

= 892, p-value = 0.000. The

statistic is 16 with8 degrees of freedom, whichhas an

d i ffe r ence te s t ca n b e u s ed w her eb y the

5.3. Implications practice

T hes e i t ems we r e r e mov e d fr o m t he fi nal v er s i o n o f the co ns tr u ct s and no t u s e d

i n the tes t i ng o f the r e vi s e d C F A and hyp o t hes i ze d m od e l s .

2 F or i te ms o f co ns tr u ct s 1 , 2 and 3 , s u rv ey r es p o nd ent s we r e a s ke d to ex p r es s t hei r a gr ee me nt w i th s t at eme nts on a fiv e p o i nt s cal e , w i t h 1 re p r es ent i ng s t ro ng l y ag re e

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

C o r re l at i o n i s s i gni fi cant a t the 0. 0 5 l e ve l ( 2 -t ai l e d ).

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