OHSAS 18001 certification and operating performance : the role of complexity and coupling

Abstract

Today, manufacturing firms encounter pressure from multiple stakeholders to manage occupational health and safety issues properly, systematically and transparently. While manufacturing firms commonly use internally developed Occupational Health and Safety Management Systems, there is growing pressure to adopt externally certified system such as OHSAS 18001. However, there are conflicting views and little empirical evidence that examines the linkage between OHSAS 18001 certification and operating performance. Hence, this paper examines the impact of OHSAS 18001 on operational performance through three theoretical lenses: Institutional Theory, Normal Accident Theory, and High Reliability Theory. We also investigate how complexity and coupling moderate the relationship between OHSAS 18001 and operational performance. Based on a sample of 211 U.S. listed manufacturing firms with OHSAS 18001 certification, we find that certification leads to significant increases in abnormal performance on safety, sales growth, labor productivity, and profitability and that these benefits increase as complexity and coupling increase.