What is it about?
The purpose of this paper is to assess to what extent the loss of the ISO 9001 certification affects the decertified firms’ financial performance.
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Why is it important?
More than one million certified companies must choose, every three years, whether to renew or to withdraw from ISO 9001 certification. This decision may have consequences on the organizational processes, quality of the products, competitiveness, customer satisfaction, and performance. As far as the authors are aware, this is the first study assessing the impact of ISO 9001 certificate withdrawal on the decertified firms’ financial performance.
Perspectives
Using standard event study methods, this paper matches a sample of 143 Portuguese companies that lost their ISO 9001 certification with similar non-event counterpart firms (according to return-on-assets (ROA) and size) and compares the performance of these two groups of firms using financial data collected from the AMADEUS database. Results show no statistical significant differences in the financial performance (as measured by ROA, return-on-sales (ROS) and sales growth) between companies that lost their ISO 9001 certification and their matched firms. Although the literature suggests that certification improves firms’ performance and that the benefits of certification may last over long periods of time, this paper’s results suggest that, after decertification, companies do not exhibit over or underperformance in their operations vis-à-vis comparable firms that do not undergo the same event.
Carlos JF Cândido
Universidade do Algarve
Read the Original
This page is a summary of: The financial impact of a withdrawn ISO 9001 certificate, International Journal of Operations & Production Management, January 2016, Emerald,
DOI: 10.1108/ijopm-11-2014-0540.
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