a case study approach to the economic evaluation of iso 9001 ...

A CASE STUDY APPROACH 

TO THE ECONOMIC EVALUATION OF 

ISO 9001 CERTIFICATION 

Paulo Sampaio 1* , Pedro Saraiva 2 , António Guimarães Rodrigues 3 

1*. Researcher, PhD, University of Minho, Production and Systems Department, Campus de 

Gualtar, 4710-057 Braga, Portugal, Phone: +351 253 604 756, paulosampaio@dps.uminho.pt 

2. Associate Professor, University of Coimbra, Chemical Engineering Department, Pólo II 

Pinhal de Marrocos, 3030-290 Coimbra, Portugal. 

3. Full Professor, University of Minho, Production and Systems Department, Campus de 

Gualtar, 4710-057 Braga, Portugal. 

Summary 

This paper presents the results obtained from studying the economic impact of quality 

management systems, based on the case study methodology. The sample of companies that 

we used comprises three companies that became ISO 9001 certified based on internal 

motivation, and three companies that have implemented their quality management system 

driven mostly by external motivation. 

Keywords 

ISO 9000, Economic-financial performance, Case study methodology. 

INTRODUCTION 

A number of studies have been carried out that try to relate the impact of quality management 

practices on organizational performance. The majority of them conclude that there is a 

positive relationship between the implementation of quality management practices and 

organizational performance improvement (Mann and Kehoe, 1994; Maani et al., 1994; 

Wisner and Eakins, 1994; Adam Jr. et al., 1997; Curkovic and Pagel, 1999; Terziovski and 

Samson, 1999; Gupta, 2000; Romano, 2000; Withers and Ebrahimpour, 2000, 2001; Lee et 

al., 2001; Singels et al., 2001; Boulter and Bendell, 2002; Dick et al., 2002; Ozgur et al., 

2002; Tarí and Molina, 2002; Tarí and Sabater, 2004; Quazi and Jacobs, 2004). 

Gupta’s (2000) results showed that ISO 9001 certified companies differed from non-certified 

ones on “technological management”, “quality management control”, “causes of poor quality” 

and “quality control techniques used”. Overall, in these categories, the usage mean values 

were higher for ISO 9001 companies. Romano (2000) has observed statistically significant 

improvements after certification, concerning “quality performance in production and on the 

reliability of the production system” and “external quality performances”. He also verified 

that “non-quality costs” diminished significantly after certification. Ozgur et al. (2002) 

observed that, for the majority of quality tools, the level of usage was higher for ISO 9001 

certified firms. Concerning the services sector, Dick et al. (2002) have concluded that ISO 

9001 certification makes a profound difference in the ways quality is perceived and measured.

Although the majority of the studies carried out state that there is a positive relationship 

between ISO 9001 certification and performance, there is a group of authors that did not find 

evidence of such a relationship (Terziovski et al., 1997; Quazi et al., 2002; Conca et al., 

2004). Results obtained by Terziovski et al. (1997) showed that the presence or absence of 

ISO 9001 certification is a poor predictor of organizational performance and quality. Quazi et 

al. (2002) concluded that there was no statistically significant relationship between ISO 9001 

certification status, quality management practices and quality results. 

There seems to be a strong relationship between companies’ certification motivations and 

resultant benefits. When firms are reacting to external pressure for certification, they may face 

ISO 9001 registration as the prime objective and adopt a minimalist approach to achieving it. 

Such firms obtain quality certification, but they may not fully value quality management 

systems, and thus will achieve limited benefits. 

According to Garvin (1984, cited in Sousa and Voss, 2002) the effect of quality on business 

performance (financial perspective) is based on two main routes: manufacturing and market. 

In the manufacturing route, improving internal process quality results in better operational 

performance that leads to business performance. In the market route, improvement of product 

quality will influence marketing business performance. 

According to Sousa and Voss (2002), quality management practices have a significant and 

strong impact on quality and operational performance. However, their impact on business 

performance is weaker and not always significant. Brust and Gryna (2002) stated that, in the 

following five economic areas, quality is of paramount importance: (1) exports competitive 

advantage; (2) national trade deficits; (3) economic growth; (4) productivity and customer 

satisfaction; (5) standardization. 

A systematic approach to quality improvement results in two key factors that drive financial 

performance: (1) it generates greater value for customers, building market share and revenues; 

(2) it lowers costs, increasing margins and asset usage (George, 2002). 

Despite all of the studies carried out in this area, the conclusions reached still have a 

contradictory nature. Some authors conclude that there is a positive relationship between ISO 

9001 certification and companies’ financial improvement (Maani et al., 1994; Wisner and 

Eakins, 1994; LRQA, 1996; Chapman et al., 1997; Janas and Luczak, 2002; Lee et al., 2001; 

Beirão and Sarsfield Cabral, 2002; Nicolau and Sellers, 2002; Wayhan et al., 2002; Chow- 

Chua et al., 2003; Dimara et al., 2004; Naser et al., 2004). However, others do not find 

evidence of such a relationship (Adam Jr. et al., 1997; Kannan et al., 1999; Haversjo, 2000; 

Lima et al., 2000; Heras et al., 2001, 2002a, 2002b; Aarts and Vos, 2001; Corbett et al., 2002, 

2005; Tsekouras et al., 2002; Martinez-Costa and Martinez-Lorente, 2003). 

Heras et al. (2001, 2002a, 2002b), regarding better financial performance presented by ISO 

9001 certified companies, argued that: (1) one must consider the multitude of variables that 

influence or can influence a company’s business performance; (2) it is important that the 

characteristics of the samples used are analysed in greater detail, because it is possible that 

higher profitability of the certified companies may have to do with the fact that certified firms 

belong to activity sectors that enjoy greater profitability levels; (3) higher profitability rates 

verified among ISO 9001 companies may be related to the most profitable companies, being 

those that have a greater propensity to be ISO 9001 certified.

Overall, no consistent evidence could be found in the literature concerning the real ISO 9001 

impact on companies’ business performance, thus motivating the fieldwork that we decided to 

carry out. 

CASE STUDIES FOR ISO 9001 PERFORMANCE IMPACT EVALUATION 

We conducted six case studies, in order to analyse the impact of ISO 9001 on companies’ 

financial performance. Our goal was to reconstruct the economic-financial company history 

with the aim of identifying the benefits and costs directly related to their quality management 

systems. The time period analysed ranged from the year when the company decided to 

implement its quality management system up to the present (2007). 

Our case study methodology was split into three main phases. First we developed the 

framework that we would use in interviews. Then we tested the framework in order to 

validate and improve it, by making a pilot case study in a textile company. 

Finally, with a revised framework, we selected six companies for which we had previously 

identified what had been their most important ISO 9001 certification motivation, either 

internal or external. Thus, we selected three companies that became certified based mainly on 

external motivation, and another three companies that became certified based mostly on 

internal motivation. We tried to choose companies that belonged to the same industrial sector, 

but with different ISO 9001 motivations. However, that was not possible, since some of the 

selected companies declined to participate in the project. To have six companies willing to 

participate, we contacted 11 companies overall. These companies were chosen from a sample 

of 48 companies for which we were pretty sure about what was their most important ISO 

9001 certification motivation (Sampaio et al., 2006, 2008, 2009). 

The external-motivation companies are from the following industrial sectors: 

Company A: EAC 12 – Chemicals, chemical products and fibres. 

Company B: EAC 28 – Construction. 

Company C: EAC 18 – Machinery and equipment. 

The internal-motivation companies are from the following industrial sectors: 

Company D: EAC 18 – Machinery and equipment. 

Company E: EAC 12 – Chemicals, chemical products and fibres. 

Company F: EAC 4 – Textiles and textile products. 

The interviews were performed with the companies’ quality managers, and for each of the 

companies we performed a qualitative analysis and a quantitative analysis. The qualitative 

analysis was performed on information collected during the interviews with the companies’ 

quality managers. In the quantitative analysis we asked the companies to characterize two 

different scenarios: the real one, with certification, and another one, without it, concerning the 

following financial indicators: 

Sales. 

Average price. 

Average production cost.

Quality management system implementation and maintenance costs. 

Using the previous set of financial indicators, we estimated the following indicator values: 

Operational Results 

Operational Results Difference 

Sales * (Average price – Average production cost) 

Estimated Operational Results with ISO 9001 - Estimated Operational Cost without ISO 9001 

We asked the companies to define the above financial indicators on an annual basis, from the 

year of the decision to implement the quality management system, until 2007. 

The goal of our quantitative analysis was to verify if there was any variation in the 

Operational Results from the scenario with ISO 9001 certification as compared with the one 

without ISO 9001 certification. 

MAIN RESULTS OBTAINED 

Based on the developed work we were able to find that ISO 9001 certification motivations 

(internal or external ones) influence the derived benefits. We have also found out that 

companies’ motivations can influence the organization’s involvement and commitment to the 

quality management system. In those companies that became certified based mainly on 

internal motivation, there is often the perception that all the organization is committed to the 

system. That is not the case when we talk about external motivation-driven companies. 

We would like to point out that the certified companies easily identified the costs related to 

their quality management systems. However, it was very difficult for the quality managers to 

quantify the direct profits (or cost reductions) associated with the quality management 

systems. Quality managers have the perception that the company’s internal organization has 

improved, but they are not able to quantify how those improvements translate into economic 

benefits. 

Those companies that did present internal motivations have perceived higher benefits than 

those that became certified based on external motivations. However, in the externalmotivation 

companies it was easier to quantify increased profits and sales deriving from ISO 

9001 certification. 

Concerning the costs related to quality management system implementation and maintenance, 

it is important to point out that the total amount is significantly higher for companies that had 

consultants helping to implement the systems. 

For the majority of the case studies we have concluded that companies are not able to support 

the fact that quality management system implementation does have a positive impact on 

companies’ economic-financial performance.

ACKNOWLEDGEMENTS 

The authors acknowledge financial support provided by Fundação para a Ciência e a 

Tecnologia (FCT) through PhD research grant (BD/16032/2004). 

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A Case Study Approach to the 

Economic Evaluation of ISO 9001 

Certification 

Paulo Sampaio*, Pedro Saraiva**, A. Guimarães Rodrigues* 

* University of Minho; ** University of Coimbra 

53rd EOQ Annual Congress 

Dubrovnik - Croatia 

Project was funded by a grant from Fundação para a Ciência e a Tecnologia 

(BD/16032/2004)

Session agenda 

Session learning objectives. 

Literature review. 

Methodology. 

Case studies. 

Main conclusions. 

Paulo Sampaio, Pedro Saraiva e A. Guimarães Rodrigues 

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Session learning objectives 


(LO) 

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Learning objectives 

At the conclusion of this session, attendees should be able to get partial 

answers to the following questions: 

What is the real ISO 9001 certification impact over business financial 

performance? 

Are “ISO 9001 quality organizations” indeed more profitable and 

competitive than the others? 

Do companies that become certified base upon internal motivations 

achieve different results, also from a financial perspective, as 

compared to the ones that become certified base mostly on external 

motivations? 


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Literature review 

(LR) 

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The literature (1/3) 

Relationship between Quality Management Systems implementation / 

certification and business financial performance improvement. 

Results of a contradictory nature are reported! 


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Principal studies (2000-2005) analyzing the effects on results of quality 

management implementation in Europe (Heras and Arana, 2006). 

Authors 

Haversjo (2000) 

Romano (2000) 

Casadesús et 

al. (2001) 

Merino (2001) 

Tarí and Molina 

(2002) 

Main conclusions 

Certified companies are more profitable than non certified companies, 

although certification does not seem to be the cause of the increase in 

profitability. 

ISO 9000 certification contributes to improving quality costs and production 

times, although it increases inspection costs. 

65% of the companies obtained improvements, internal as well as external, 

following implementation of the ISO 9000. The profit-motivation relationship 

stands out, given that the companies certified for internal reasons obtain 

greater profits. 

There are significant activity sectors differences between QM practices and 

their influence on results. The companies reaching the highest indexes of 

QM implementation obtain the best results. 

Those companies that have put QM into practice have improved business 

results, client satisfaction, employee satisfaction and social impact. 


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Authors 

Gotzamani and 

Tsiotras (2002) 

Martínez-Lorente 

and Martínez-Costa 

(2002) 

Dimara et al. (2004) 

Lagrossen and 

Lagrossen (2005) 



In the opinion of the managers, ISO 9000 contributes to improve internal 

company organization and operating results. 

TQM has a positive effect on the operating results. However, the 

simultaneous application of ISO 9000 and TQM models cancel those 

positive effects. 

The financial results of certified and non certified companies are 

analyzed taking in account their strategic orientation, which is, in the 

end, the variable affecting company profitability. 

The results show that there is a correlation between the adoption of the 

values if TQM and successful QM. 

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Methodology 

(M) 

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Methodology (1/4) 

Methodology: Case study – six companies. 

Goal: reconstruct the economic-financial companies’ history with the 

aim of identifying the benefits and costs directly related to the quality 

management system, since the QMS implementation year up to the 

present (2007). 


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Phases 

Development of the framework used during the interviews. 

Pilot case study in order to validate and improve the framework. 

Revision of the framework based upon pilot case study feedback. 

Companies’ selection (three external motivation companies and three internal 

motivation ones). 

Case studies – interviews with the companies´ quality managers. 

Notes 

In order to have six companies willing to participate, we have contacted 11 

companies overall. 

These companies were chosen from a sample of 48 companies, for which we 

have previously indentified what was their most important ISO 9001 

certification motivation (Sampaio et al., 2006, 2008, 2009). 


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Case Studies 

Qualitative and Quantitative analyses. 

Qualitative – analysis performed over information collected during 

the interviews with the companies’ quality managers. 

Quantitative – the quality managers were asked to characterize two 

different scenarios, the real one, with certification, and an hypothetic 

scenario, without it, in terms of: 

- Sales. 

- Average price. 

- Average production cost. 

- QMS implementation and maintenance costs. 


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Financial indicators analyzed 

Operational Results 

Sales * (Average price – Average production cost) 

Operational Results Difference 

Estimated OR with ISO 9001 – Estimated OR without ISO 9001 


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Case studies 

(CS) 

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Case study A – External Motivations (1/3) 

Company A, EAC 12 – Chemicals, chemical products and fibers 

Qualitative analysis 

ISO 9001 motivations – (1) company internationalization; (2) access to new 

foreign markets. 

Top management commitment decreased over time. 

ISO 9001 benefits – (1) internal organizational improvements; (2) improvement of 

the NC identification and treatment processes; (3) access to new markets; (4) 

corporate image improvement; sales growth as a result of the QMS certification. 

The company is better organized than it was before ISO 9001 certification and 

the company best clients only become company clients after certification. 


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Quantitative analysis – Operational Results 

Operational Results (€) 

4.500.000,00 

3.500.000,00 

2.500.000,00 

1.500.000,00 

500.000,00 

-500.000,00 

-1.500.000,00 

-2.500.000,00 

-3.500.000,00 

-4.500.000,00 

Implementation 

2001 2002 2003 2004 2005 2006 2007 


Certification 

170.000,00 

120.000,00 

70.000,00 

20.000,00 

-30.000,00 

-80.000,00 

-130.000,00 

-180.000,00 

QMS costs Operational Results w ith ISO 9001 Operational Results w ithout ISO 9001 

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QMS costs (€) 

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Quantitative analysis – Operational Results Difference 

Operational Results Difference (€) 

500.000,00 

400.000,00 

300.000,00 

200.000,00 

100.000,00 

0,00 

-100.000,00 

-200.000,00 



Certification 

2001 2002 2003 2004 2005 2006 2007 

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Case study B – External Motivations (1/3) 

Company B, EAC 28 – Construction 


ISO 9001 certification main motivation – access to public contracts. 

The company internal organization significantly improved after the QMS 

implementation. However the quality manager was not able to quantify those 

improvements. 

The organization commitment and involvement decreased over time, with 

exception of the days before the audits take place. 


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20.000.000,00 

15.000.000,00 

10.000.000,00 

5.000.000,00 

0,00 

-5.000.000,00 

-10.000.000,00 

-15.000.000,00 

-20.000.000,00 



Certification 

2002 2003 2004 2005 2006 2007 

150.000,00 

100.000,00 

50.000,00 

0,00 

-50.000,00 

-100.000,00 

-150.000,00 


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20.000.000,00 

15.000.000,00 

10.000.000,00 

5.000.000,00 

0,00 

-5.000.000,00 

-10.000.000,00 

-15.000.000,00 

-20.000.000,00 



Certification 

2002 2003 2004 2005 2006 

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Case study C – External Motivations (1/3) 

Company C, EAC 18 – Machinery and equipment 


The company became ISO 9001 certified because in the year 2000 it was 

“fashion” for companies to have a certified QMS. 

The QMS implementation process was extremely bureaucratic and the system 

maintenance costs were significantly higher for the reality of the company. 

The ISO 9001 benefits were not higher than the costs needed to maintain the 

QMS certified. 

The top management involvement with the system was very scarce . 

Company C was not able to quantify the economic benefits that have been 

derived from the system. However the costs directly related with the QMS were 

easily pointed out. 


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2.500.000,00 

2.000.000,00 

1.500.000,00 

1.000.000,00 

500.000,00 

0,00 

-500.000,00 

-1.000.000,00 

-1.500.000,00 

-2.000.000,00 

-2.500.000,00 

Certification 


2000 2001 2002 2003 2004 2005 2006 2007 


Certification 

withdrawn 

40.000,00 

30.000,00 

20.000,00 

10.000,00 

0,00 

-10.000,00 

-20.000,00 

-30.000,00 

-40.000,00 


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35.000,00 

25.000,00 

15.000,00 

5.000,00 

-5.000,00 

-15.000,00 

-25.000,00 

-35.000,00 

Certification 

2000 2001 2002 2003 2004 2005 2006 2007 



Certification 

withdrawn 

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Case study D – Internal Motivations (1/3) 

Company D, EAC 18 – Machinery and equipment 


The company became certified with the aim of improving its internal organization. 

The company has the perception that its internal organization improved after the 

system implementation, but the quality manager was not able to quantify those 

improvements. 

All the organization is committed and involved with the QMS – the quality 

manager belongs to the company top management. 


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140.000,00 

90.000,00 

40.000,00 

-10.000,00 

-60.000,00 

-110.000,00 

-160.000,00 


2001 2002 2003 2004 2005 2006 2007 


Certification 

45.000,00 

35.000,00 

25.000,00 

15.000,00 

5.000,00 

-5.000,00 

-15.000,00 

-25.000,00 

-35.000,00 

-45.000,00 


LO LR M CS MC 


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0,00 

-10.000,00 

-20.000,00 

-30.000,00 

-40.000,00 

-50.000,00 

-60.000,00 

-70.000,00 

-80.000,00 

-90.000,00 

2001 2002 2003 2004 2005 2006 2007 


Certification 


LO LR M CS MC 

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Case study E – Internal Motivations (1/3) 

Company E, EAC 12 – Chemicals, chemical products and fibers 


The QMS was implemented mainly to achieve internal organizational 

improvements. However, the quality manager opinion is that, actually, ISO 9001 

certification does not represent significant competitive advantages. 

Company E was not able to quantify the organizational improvements and 

translate them into economic benefits. 


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1100000 

600000 

100000 

-400000 

-900000 

-1400000 


2003 2004 2005 2006 2007 


Certification 


6.000,00 

4.000,00 

2.000,00 

0,00 

-2.000,00 

-4.000,00 

-6.000,00 

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6.000,00 

4.000,00 

2.000,00 

0,00 

-2.000,00 

-4.000,00 

-6.000,00 



2003 2004 2005 2006 2007 

Certification 

LO LR M CS MC 

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Case study F – Internal Motivations (1/3) 

Company F, EAC 4 – Textiles and textile products 


Company F became certified based upon a strategic decision of the top 

management in order to improve the company internal organization. 

The QMS is being used as a continuous improvement tool. 

The organization is committed with the QMS – quality manager belongs to the 

company top management. 

The quality manager has the perception that the company internal organization 

improved as a result of the QMS implementation. However, he was not able to 

quantify the economic value of those improvements. 


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2.500.000,00 

2.000.000,00 

1.500.000,00 

1.000.000,00 

500.000,00 

0,00 

-500.000,00 

-1.000.000,00 

-1.500.000,00 

-2.000.000,00 

-2.500.000,00 


2000 2001 2002 2003 2004 2005 2006 2007 


Certification 

60.000,00 

40.000,00 

20.000,00 

0,00 

-20.000,00 

-40.000,00 

-60.000,00 


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350.000,00 

300.000,00 

250.000,00 

200.000,00 

150.000,00 

100.000,00 

50.000,00 

0,00 


2000 2001 2002 2003 2004 2005 2006 2007 


Certification 

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(MC) 

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The internal motivations companies do present higher benefits perception, but 

they are not able to quantify how those improvements translate into economic 

benefits. 

In the external motivations companies it is easier to quantify increased profits 

and sales deriving from ISO 9001 certification. 

For the majority of the internal motivations companies that were analyzed there is 

often the perception that all the organization is committed with the system. This is 

not the case when we talk about external motivation driven companies. 

It is not unanimous that the certified companies would be less profitable if they 

had not implemented their QMS. 

We were not able to support the thesis that QMS implementation does have a 

positive impact over companies’ economic-financial performance. 


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Paulo Sampaio 

University of Minho, Portugal 

E-mail: mail: paulosampaio@dps.uminho.pt 

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a case study approach to the economic evaluation of iso 9001 ...

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