The impact of contextual factors on the efficacy of ISO 9000 adoption

Abstract

This study investigates the importance of contextual factors on the efficacy of ISO 9000 adoption. We explore the role of various contextual factors at the firm-level (i.e., technology intensity, labor productivity, and labor intensity) and industry-level (i.e., industry efficiency level, industry competitiveness, industry sales growth, and industry ISO 9000 adoption level) that potentially impact the efficacy of ISO 9000 adoption. We carry out a hierarchical linear modeling (HLM) analysis based on objective financial data from 438 U.S. manufacturing firms. The results show that firms with low technology intensity, low labor productivity and high labor intensity reap more benefit from ISO 9000 adoption. Firms in industries with low efficiency levels, high competition, high sales growth and low ISO 9000 adoption levels also obtain more benefit from the adoption. Our research provides supporting evidence for the context-dependent proposition of ISO 9000 adoption. Given the significant costs and resources involved, it is crucial for operations managers to assess to what extent ISO 9000 might benefit their performance before embarking on the implementation process.