Understanding firms selection of their ISO 9000 third-party certifiers

Abstract

Non-financial auditing and third-party certification of management systems (such as the ISO 9000 quality management system) is becoming a pervasive activity amongst an increasing number of firms and their supply chains. Though the literature has paid substantial attention to adopting firms, there has been little focus on the interrelationship between third-party certifiers and adopting firms. Building on voluntary standards literature and the attitude theory, we investigate how do firms choose from a competing set of certification bodies and how does such a decision impact their satisfaction with certification. We use a sample of 539 firms in Australia and New Zealand certified against ISO 9000 standard. We demonstrate that the selection of third-party certifiers is influenced by firms auditing orientation and that firms oriented to continuous improvement auditing (as opposed to mere compliance with the standard) focus on choosing reputable auditing firms. We have also determined that reputable certifiers deliver more insightful audits, which contribute to overall satisfaction with the certification. The findings have implications for managers and for certification bodies. Managers should understand that cost savings from certification services have negative impact on the satisfaction from certification. For certification bodies, the paper provides an insight how firms select their certifiers.