ISO 9000 Performance and Implementation Problems

The Impact of ISO 9000 Certification on Operational Performance: An Empirical Investigation.

[004-0027]

.M. Tawfik Mady, Ph.D [email protected]

Dept. of Quantitative Methods and Information Systems ,College of Business Administration, Kuwait University

P.O. Box: 5486 Safat – Code 13055, Kuwait

Seventeenth Annual Conference of POMS – Boston 2006 April 28 – May 1, 2006 Boston, MA., USA

1 Abstract

This paper provides two reliable and valid constructs, "human resource development" and "cost reduction", for measuring ISO-9000 expected internal benefits. Level of expectation, perceived achievement, and the difference (gap) between them, in a sample of fifty Egyptian certified plants, are therefore presented. The study also investigates the effects of plant characteristics (plant size; age; time since certification and type of certificate (9001 or 9002)) on these benefits. Improving employee cooperation, innovation enhancement, and better communication and waist reduction were the top four expected internal benefits of being certified. The study supports the existence of significant gaps between level of expectation and level of perceived achievement of all goals. Egyptian firms did not get what they asked for when applying for IS0-9000 certification. Their expectations were significantly higher than their perceived benefits. The findings also reveal that none of the plant's characteristics has any significant effect on its level of expectation and/or perceived achievement from the ISO certification. Accordingly, plant characteristic was not a determinant of the level of dissatisfaction, in terms of the estimated negative gap, with ISO certification, indicating that disappointment appears general among all manufacturing units and for all types of certification. Finally, level of expectation showed significant positive association with perceived achievement and the use of goal expectation as predictor of goal achievement, through regression analysis, was confirmed for the factor scores of the two constructs.

INTRODUCTION

Since the introduction of the 1SO 9000 series of quality standards in 1987, the existence of a positive relationship between ISO-9000 certification and performance was always promoted and taken for granted. It can be noticed, however, that this relationship was not confirmed in some empirical studies. This hypothesized relationship was subject to several studies during the last decade. Dunstan (1993), Struebing (1996), Jones et al. (1997), Yahya and Keat (2000), Sohail and Hoong (2003) and Quazi and Jacobs (2004) claimed some empirical evidence showing that certified companies have benefited internally and externally from ISO 9000 certification. Controversially, problems with ISO 9000 certification have been well documented in papers by Meegan and Taylor (1997), Dick (2000) and Singels et al. (2001). Furthermore, it was confirmed that ISO certification, by itself, did not lead automatically to any significant improvement in the performance of organizations (Terziovski, et al., 1997; Jeng, 1998; Lima et al, 2000; Singels, et al., 2001) and has helped the companies in improving their product quality only marginally (Kotreshwar, 2004). With these contradictory conclusions concerning the possible benefits of ISO certification, further empirical investigations seem to be necessary. This is especially true in underdeveloped countries with emerging economies such as Egypt. The first contribution of this paper is to develop a valid and reliable scale for ISO-9000 internal benefits and use this scale to document the main benefits that were expected by Egyptian firms when applying for the certificate. In an effort to provide a better understanding of the business value of being certified, several scholars have investigated both the reasons (motives) and perceived effects of the ISO-9000 certification (Jones, et al., 1997; Madhya and Keat, 2000; Sun and Cheng, 2002; Terziovski, et al, 2003). Noticeably, none of these studies has addressed explicitly the concept of the discrepancy between goal expectation and goal achievement when considering the benefits of ISO 9000 certification. According to this

2 concept, a company satisfaction with ISO certification is a function of the gap between expected and perceived benefits. Analyzing the gap between expectations and perceived achievement has been a widely used approach in marketing studies for about two decades. Lewis and Booms (1983) believed service quality to be a measure of how well the service level matches customers’ expectations. In a similar manner, Gronroos (1984) and Parasuraman et al. (1985) argued that service quality, as perceived by customers, stems from a comparison of their expectations of the services they will receive with their perceptions of the performance of the service provider. Based upon this, Parasuraman et al., (1988) provided an instrument, the SERVQUAL scale, for measuring service quality across a broad range of services. The respondents’ expected levels of service and the perceived level of service provided are measured for a 22 pairs of Likert-type items. Accordingly, service quality is measured by the difference (gap) in scores between the perceived level and the expected level of service provided. This gap approach has been widely used in measuring quality in several service sectors. Hotels (Ingram and Daskalakis, 1999), airline (Sultan and Simpson, 2000), higher education (Rigtti and Pitt, 1992; Anderson, 1995), banks (Jabnoun, et al., 2003), theme parks (O’Neill and Palmer, 2003) and hospitals (Lam, 1997; Lim and Tang, 2000; Hwang et al., 2003) represent few examples. The second contribution of the current study is to utilize the gap-analysis approach in investigating the level of satisfaction of Egyptian companies with ISO 9000 certification based upon the differences between their internal motives for getting the certification and their perceived internal benefits after being certified. The paper also investigates empirically the possible correlation between ISO-9000 expected and perceived benefits. Specifically, the main research questions for this study are: 1. What are the main expected internal benefits from ISO 9000 certification in Egypt? 2. Are their any significance differences between expected and perceived benefits of the certification? 3. What is the level of association between plant characteristics and the expected goals and perceived benefits? In addition, between plant characteristics and the gap score. 4. Is it possible to use the level of expectation as a predictor of the perceived achievement?

LITRETURE REVIEW AND RESEARCH HYPOTHESES

Several empirical studies seem to support the positive effect of ISO certification on performance. Struebing (1996) reported a survey of 48 small and mid-size ISO 9000 certified companies in N.Y. The findings showed that companies seek certification due to customer requirements and as a way to increase efficiency through the documentation process. Over half of the surveyed companies showed increase in employee motivation, role acceptance, and personal accountability for job performance. Overall, the survey found that ISO 9000 registration produce favorable results. Huarng (1998) reached similar positive results. His survey showed that ISO 9000 certificates help companies gain benefits in internationalization, quality improvement, sales enhancement, and cost reduction. In Malaysia, Sohail and Hoong (2003) empirically tested the differences in performance between firms with and without ISO 9000 certification in a sample of small

3 to medium enterprises. They confirmed the hypothesis that ISO 9000 certification contributes to a higher organizational performance. Similarly, costs, benefits and the satisfaction level with ISO 9000 implementation were surveyed in a sample of 140 certified manufacturing firms in Saudi Arabia (Maged et al., 2003). The study indicated that Saudi firms are satisfied with ISO 9000 and believe that the certification contributes to organizational survival and success. Along the same line, Quazi and Jacobs (2004) confirmed the positive impact of the certification on the firm’s training and development activities. Contradictory, the literature also cited some disadvantages that result from ISO certification. Singels et al (2001) listed some of these disadvantages such as extra cost for achieving the certification, increase in paper workload, no attention for development of personnel, little attention for the support functions in an organization. Furthermore, ISO certification, according to their argument, may discourage creative and critical thinking in an organization, because employees are forced to work according to well-described procedures and rules. Meegan and Taylor (1997) reported that European companies are too much preoccupied with registration to ISO 9000. Companies tend to see the certification not as a mean but as an end in itself. They concluded that ISO 9000 certification by isolation is of limited value. In addition, several empirical studies failed to detect any significant relationship between quality certification and firm performance. In a large sample of 962 Australian and 379 New Zealand manufacturing sites, Terziovski et al. (1997) tested the strength of the relationship between ISO 9000 certification and organizational performance in the presence and absence of a total quality management environment. There finding supports the absence of any significant positive effect of ISO 9000 certification on organization performance in the presence or absence of a TQM environment. Lima et al, (2000) reached similar results in Brazilian firms. Singels, et al (2001) studied the relationship between ISO 9000 certification and the performance in 192 manufacturing and service organizations working in north Holland. They contrasted the organizations that are concerned with quality certification and those that are not. Their findings indicated the no significant differences on the “improvement of the production process”, “customer satisfaction”, and “personal motivation” between the two groups. On the contrary, a significant difference was found between the two groups, in favor of the organizations that did not have a quality certificate, on the “improvement company result” and “investments on means” performance outcomes. They concluded that the gaining of quality system certificate alone is not sufficient for gaining positive results on performance outcomes, as is often expected. Similar results were reached by Sun, et al., (2002) in a sample of 180 Norwegian manufacturing companies. They showed that for the SMEs, certification is correlated marginally with performance. Moreover, for large companies, no significant correlation was identified. In sixteen ISO 9000 Indian companies, Mahadevappa and Kotreshwar (2004) investigated the effect of eight critical factors of quality management on quality performance. They showed that ISO 9000 certification has helped the companies in improving their product quality only marginally. In Egypt, some business and operational performance benefits were claimed for ISO 9000 by some governmental agencies. In 1999, the Industry Leaders Development Center (ILDC), who is in charge of the development and training of executives for Egyptian state-owned manufacturing companies, carried out a very limited survey of twelve state-owned certified firms. The survey claimed several certification benefits related to the enhancement of top management, operations, sales and marketing and

4 human resources (ILDC, 1999). SGS, an accredited international certification company, explored the reasons for seeking ISO 9000 certification and its expected internal and external benefits as perceived by certified Egyptian companies. Based on their limited survey and some case studies, they claimed specific benefits such as better documentation, greater quality awareness, higher perceived quality by customers, improved customer satisfaction and achieving competitive edge for the company (SGS, 1999). However, the same survey cited several problems that are associated with the certification process. Some of these problems are the very lengthy period to write manuals, too much paper work, high implementation cost, high cost to maintain the certification, and the vagueness of some ISO required standards. Obviously, empirical research on ISO-9000 benefits in Egypt is very limited and suffers from less rigorous research methodology and low credibility. Most third-party assessment firms are expected to promote ISO certification as a mean for improving operational and business performance. Therefore, a more systematic and rigorous methodology is used in the current study to reach a reliable and valid scale for measuring ISO-9000 expected internal benefits among ISO-certified Egyptian firms.

Research Hypotheses:

IS0-9000 Goal Expectation and Goal Achievement: As mentioned above, several scholars have investigated both reasons (motives) and perceived effects of ISO-9000 certification (Jones, et al., 1997; Yahya and Keat, 2000; Sun and Cheng, 2002; Terziovski, et al, 2003). Noticeably, none of these studies has addressed explicitly the concept of the discrepancy between goal expectation and goal achievement when considering the benefits of ISO 9000 certification. According to this concept, a company satisfaction with ISO certification is a function of the gap between expected and perceived benefits. The second contribution of the current study is to test for the significant level of this gap in order to provide a true assessment of Egyptian firms’ level of satisfaction with ISO 9000. Due to the exploratory nature of this study, the main null hypothesis of this research was formulated as follows: H01: There are no significant differences between ISO 9000 expected and perceived internal benefits. Plant Characteristics and ISO-9000 Internal Benefits: In the current study, plant characteristics include plant size (in terms of number of employees), plant age, the time length of having the certificate and ISO 9000 certificate type (9001 or (9002). The impact of firm size on ISO 9000 implementation was subject to several studies. In Australia, Wiele and Brown (1997/1998) revealed that organizations with less than 250 employees felt forced by external factors to go for ISO 9000 certification and were less likely to implement a continuous TQM program. Kie and Palmer (1999) reported a very similar finding on small companies in New Zealand. They stressed that small companies, when compared to larger ones, were more likely to implement ISO 9000 because of external factors rather than internal factors. Similarly, Sun and Cheng (2002) found that Norwegian SMEs implement ISO 9000 because of market and customer demand or external pressure rather than internal initiation. Since internal benefits is the main focus of the study, the following null hypothesis will be tested in the Egyptian industry: H02: Plant size has no significant effect on ISO-9000 expected and achieved internal benefits. It also has no significant effect on the level of satisfaction/ dissatisfaction with the certification.

5 The effect of the length of the ISO-9000 registration period on an organization perceived benefits was subject to some empirical studies. Brecka (1994) and Singels et al. (2001) reported that longer practice of the system tends to lead to greater perceived benefits. On the contrary, Jones et al. (1997 and Terziovski et al. (2003) demonstrated that benefits actually decrease with time since registration. Coined this as “the erosion of ISO-9000 benefits”, Casadesus et al. (2005) confirmed that the perceived benefits decrease significantly over time in a sample of 399 Spanish companies. With these contradictory results, the following null hypothesis was formulated: H03: Time since registration has no significant effect on ISO 9000 expected and perceived internal benefits. It also has no significant effect on the level of satisfaction/ dissatisfaction with the certification. In addition, the study explores the effect of two more plant characteristics as follows: HO4: Plant age has no significant effect on ISO 9000 expected and perceived internal benefits. It also has no significant effect on the level of satisfaction/ dissatisfaction with the certification. HO5: Certification type (9001 or 9002) has no significant effect on ISO 9000 expected and perceived internal benefits. It also has no significant effect on the level of satisfaction/ dissatisfaction with the certification.

Expectations as predictors: In order to associate a company reasons for getting ISO-9000 certificate with its achieved benefits, researchers argue that the type of motivation of an organization plays an important role in explaining their level of performance. Accordingly, the motive for seeking certification could be used as an important predictor of performance (Dick, 2000). Yahya and Keat (2000) reported that companies with developmental, in contrast to non-developmental and mixed-reasons in seeking certificate have higher internal perceived benefits. This preposition was formulated as the following two additional null hypotheses: H06: The plant's ISO-9000 expected internal benefits are not significantly correlated with its perceived benefits. H07: The plant's ISO-9000 expected internal benefits are not a predictor of its perceived benefits.

RESEARCH METHODOLOGY

Sampling and Data Collection: The data collection process took place in Borg Al-Arab (Alexandria) and The Tenth of Ramadan (Cairo) industrial zones in Egypt. At the time of collecting the data, between 2000 and 2001, the two areas were having about eighty ISO 9000 certified plants. After an introductory telephone call with most certified manufacturing companies in the two areas, questionnaires were sent out to the general managers of all certified plants. In an attached covering letter, he was asked to pass the questionnaire to the plant manager who participated in getting the certificate for the plant and who is in a position to asses the level of achievement of the expected goals. Through the personal contact of an MBA student, who is the owner and general manager of a leading pharmaceutical company in Borg Al-Arab area and an active member of the Borg Al-Arab Investors Association (BAIA), a high response rate of about 70 % (56 questionnaires) was secured. However, only fifty of them were considered complete and therefore were subject to statistical analysis. Table 1 provide a profile of these 50 responses.

6 Table 1 Sample Profile (N = 50 plants)

Number of Plants Percent ISO Type - ISO 9001 Certificated plants 18 36.0 % - ISO 9002 Certificated plants 32 64.0 % Plant Size (Number of employees) - SME (less than 250) 20 40.0 % - Large (250 or more) 30 60.0 % Time Since Registration (years) - Recent (3 years or less) 31 62.0 % - Experienced (more than 3 years) 19 38.0 % Plant age (Years in Operation) - Modern (8 years or less) 18 36.0 % - Moderate (More than 8 and less than or equal 15 years) 16 32.0 % - Old (More than 15 years) 16 32.0 % ------

The Survey Instrument and Research variables

Three research variables are of interest in this study: plant characteristics, ISO- 9000 expected and perceived internal benefits. A pilot-tested questionnaire, that includes these variables, was especially designed and administrated for this study. The survey instrument was refined for clarity and relevance by top officials of some ISO 9000 certified firms who are members of the Alexandria Business Men Association (ABMA). 1. Plant Characteristics: The first part of the survey covered some of the plant characteristics that might have an effect on expected and perceived benefits of the ISO 9000 quality assurance system. This includes plant size (in terms of number of employees), plant age and the time length of having the certificate, and ISO 9000 certificate type (9001 or (9002). In the current study, the number of employees measures plant size, which is normally the case in similar empirical studies. The definition of plant size is, by nature, a country specific scale. While an SMEs is usually characterized as companies with fewer than 250 employees in the UK, Sun and Cheng (2002) used 150 as the cut-off between SME and large companies in Norway. On the other hand, Wiele and Brown (1997) consider companies with less than 50 employees are small and others with 50-100 employees are medium size. In this research, the UK approach is followed. SME will refer to Egyptian plants with fewer than 250 employees. 2. ISO-9000 Internal Benefits: ISO certification is said to give certain internal and external benefits for organizations (Dunstan, 1993; Motwani et al., 1996; Tsiotras and Gotzamani, 1996; Yahya and Keat, 2000; Singels et al, 2001). Internal benefits are related to the internal functioning of organizations. These benefits are related to the processes and structure of the organization. These are, for example, increase in productivity, improvement in

7 efficiency, reduction in costs and waste, better management control, clearly-defined organizational task structure and responsibilities, improved co-ordination structure, support in decision making, and increase in personal motivation. External benefits are benefits concerning the organization in relation to its environment. Examples of external benefits are: competitive advantage, increase in sales and market share, possibility for entering new markets, keeping customer relations, finding new customers, increased customer satisfaction, increase in company reliability and reputation. In this study, only internal benefits are of interest. Drawn from previous literature, eleven internal benefits were selected for this study. These are: production costs reduction, rework and defect reduction, labor productivity improvement, aggregate productivity improvement, waist reduction, quality improvement, inventory reduction, greater cross-functional cooperation, innovation enhancement, improve internal communications, higher employees’ motivation. Appendix 1 include a list of these benefits. Respondents were asked to indicate their level of expectation for each of the eleven goals when they applied for certification. Therefore, goal expectation levels were measured on an ordinal 5-point Likert scale where “very low expectation” (1); “low expectation” (2); “moderate expectation” (3); “high expectation” (4); and “very high expectation” (5). Because, the questionnaire was designed to allow comparing expected and perceived internal benefits of ISO 9000 certification in terms of “level expectation” and “level of achievement” for each claimed benefit, the same set of benefits was used in another separate question. In a similar manner, each respondent was also asked to indicate his perception of the impact that ISO-9000 system implementation have had on achieving each of the listed internal goals through the using of the same scale, “very low achievement” (1); “low achievement” (2); “moderate achievement” (3); “high achievement” (4); and “very high achievement” (5). Although measuring goal achievement using subjective scales has the risk of getting biased opinions, this approach was considered practical and feasible. Firms, especially small and medium-sized, usually hesitate to provide any factual performance data about its internal operations. The gap score, for a specific goal, is simply the difference between its expectation and achievement sores. Hence, a negative mean score indicates the level of dissatisfaction with ISO-9000 certification concerning the relevant goal.

Statistical Analysis: The content validity of the ISO-9000 internal benefits’ scale was established through factor analysis. Scores of the investigated eleven expected internal goals were subject to the principle component analysis with varimax rotation to determine if all internal goals are assigned to one or more factors. Llopis and Tari (2003) utilized this approach to identify groups of motives for seeking certification in 106 certified Spanish firms. In addition, reliability analysis, based on the Cronbach’s alpha values, was used to test any labeled construct for its internal consistency. Results of the factor analysis are presented and discussed in the results' section. Because of the relatively low sample size of the current study (only 50 plants), testing the collected data of each individual goal for the satisfaction of the normality condition was performed. This is usually a prerequisite condition, among other assumptions, for using most parametric statistics. The goodness of fit Kolmgorov- Smirnov test results revealed an obvious deviation from normality for the eight variables (goals) that were identified through factor analysis in the two distinguished constructs. This was true for level of expectation, level of achievement, and the gap scores of these variables. Therefore, a non-parametric Wilcoxon signed-rank test for two related samples

8 was carried out to test for any significant differences between levels of expectation and levels of achievement. This test can be considered a paired-samples t test for nonparametric variables. Nonparametric tests are having the advantages of making the minimal assumption about the underlying distribution of data and are often called distribution-free methods (Aczel, 1996). Additionally, both Mann-Whitney and Kruskal Wallis tests were used to test for any significant differences between group means, based on any of the plant characteristics. Since each factor score of the two identified constructs (HRD and CR) is formulated by regression of the loading coefficients with means of zero and follow normal distribution, using parametric statistics was justified for any statistical analysis of the factor scores of these two constructs. The conventional parametric correlation and regression procedures were used in investigating the level of association between goal expectations and goal achievements at the factor level.

RESULTS

1. Internal Benefits’ Scale validity and reliability:

Table (2) Factor Analysis and Internal Consistency Test Results of the ISO-9000 Expected Internal Goals ------Factor Analysis Internal Consistency Results Results ------Factor Factor Alpha if Expected Goals One Two item deleted ------Factor 1 Greater employees cooperation 0.748 0.8797 Innovation enhancement 0.860 0.8546 Better communication 0.694 0.8868 Increase in Personal Motivation 0.808 0.8592 Labor productivity improvement 0.842 0.8477 Eigenvalue = 4.905, % of Variance = 42.889 Cronbach’s alpha 0.8900 Given name: "Human Resources Development" benefits ------Factor 2 Waist reduction 0.909 0.8320 Production costs reduction 0.788 0.8991 Rework reduction 0.894 0.8338 ------Eigenvalue = 1.153, % of Variance = 32.858, Cumulative % = 75.717 Cronbach’s alpha 0.9003 Given name: "Cost Reduction" benefits ------Extraction Method: Principle Component Analysis - Rotation Method: Varimax with Kaiser Normalization

9 Results of the factor analysis, in Table 2, do not confirm the uni-dimentionality of the ISO-9000 expected internal benefits in Egypt. On the contrary, it supports having two distinctive factors. Five variables were loaded on the first factor and three were loaded on the second. The loading coefficients were higher than 0.70 for all goals in both cases. Three variables, “inventory reduction”; “improve product quality” and “aggregate productivity improvement”, were deleted because their factor loading coefficients were below 0.50. Based upon the nature of the group of benefits that were loaded on each factor, the two factors were named “Human Resources Development” and “Cost Reduction ” benefits respectively. These two identified factors are able to explain together about 75.7 percent of the scale variation. The Cronbach’s alpha value of each construct for the data collected in the current study, in Table 2, indicates a very high level of internal consistency among items for each of the two multi-item scales. The reliability estimates of the two scales are 0.8477 and 0.9003 respectively. According to Hair et al., (1992), an alpha value higher than 0.070 is considered acceptable.

2. Expected Internal benefits of ISO 9000 Certification: Table 3 depicts the corresponding mean scores and standard deviations for the eight identified internal goals when applying for ISO 9000 certification. It shows the mean levels of both expectation and achievement for each goal and for the two distinctive groups of internal goals. A construct mean is defined as the overall mean of the mean scores for each of the goals that together constitute the factor of interest. As for level of expectation, results indicate that human resources related goals scored almost the same as the cost reduction related ones. The mean expectation levels of the two groups are almost identical with mean scores of 4.06 and 3.91 respectively. The highest mean value for the human resources related goals is “Greater Employees’ Cooperation” flowed by “Innovation Enhancement” then “Enhance inter-company Communication”, with average expectation levels of 4.18., 4.08, and 4.08 respectively. Even the least expected goal in this group, “Motivating Employees”, scored a relatively high mean score very close to 4.0. This means a “high expectation” level in the survey instrument. Obviously improving the so-called “soft side of the organization” was a major objective for getting ISO 9000 certificate by Egyptian manufacturers. When considering the second group of internal goals, results show that using ISO 9000 certification for cost reduction purpose was highly expected by participants with a relatively high mean score of 3.91. At the top of these group, “waist reduction” comes first (3.04), “production cost reduction” second (3.88) then “rework reduction” (3.84).

3. Perceived Internal benefits of ISO 9000 Certification: Table 3 indicates that the top achieved group of goals from being ISO certified firm is the “development of human resources” with a mean score of 3.91. This includes “Greater Employees cooperation” and “Enhancing inter-company communication” with a relatively high score of 3.74. ISO holders reported a lower level of achievement of the “cost reduction” goal, only 3.39. They were able, however to achieve “waist reduction” with a reasonable score of only 3.60. In general, the least achieved two internal goals as perceived by certified firms are “motivating employees” and “rework reduction” with mean scores of 3.46 and 3.28 respectively.

4. Expected versus Perceived Internal Goals (Gap Analysis):

10 Because the definitions of the scales of goal expectation and its perceived achievement are identical, Table 3 allows a pair comparison between the expected goals and their actual achievement. The gap score for each expected/achieved goal, as reported in the table, is the mean score of the difference between the reported score for the level of expectation and the level of achievement of the associated goal. Therefore, a negative reported value goal implies the firm dissatisfaction level with the certification process as for this specific goal. As reported in Table 3 table, all items exhibit negative gaps, indicating that perception of actual effects fell short of expectations. This implies the general dissatisfaction of the surveyed firms with ISO 9000 certification. When comparing the gap scores of the two internal-goal groups, it is easy to conclude that certified firms are more dissatisfied with the “cost reduction” capabilities of ISO certification. In general, the largest negative gap occurred for “Production cost reduction”, “Rework reduction”, and “Employees innovativeness enhancement” with a gap scores of -0.58, -0.56 and -0.52 respectively. This is where most levels of dissatisfaction are expected to exist. On the other hand, “Enhancing inter-company communications“exhibits the smallest gap between a plant expectation and perceived benefits. In general, these findings reveal that Egyptian plants did not get what they asked for when applying for IS0 9000 certification. Their expectations were higher than their perceived benefits for all goals. In order to test for the existence of any significant statistical differences between expected and achieved goals, the Wilcoxon signed-ranks test, for paired observations, is utilized. The test results, in Table 3, shows that goal expectation and goal achievement differ significantly from each other for all internal goals of ISO 9000 certification. The same conclusion is true for the differences between the aggregate mean score of the identified two groups of internal goals, “human resources development” and “cost reduction”. In addition, the overall internal expectation is significantly higher than the overall perceived achievement. Therefore, hypothesis number was rejected for all ISO certification internal goals.

Table (3) ISO 9000 Internal Goals’ Gap Analysis (Expected benefits, Perceived achievements, Gap and the Wilcoxon Signed Ranks test results) ------Level of Level of Expectation Achievement Gap Score Wilcoxon Test Mean S.D. Mean S.D. Mean S.D. Z Sign. ------Human resource goals Employees cooperation 4.18 0.720 3.74 0.876 -0.44 0.861 -3.304 0.001** Innovation enhancement 4.08 0.944 3.56 1.072 -0.52 1.147 -2.953 0.003** Better communications 4.08 0.986 3.74 1.006 -0.34 1.147 -2.351 0.019* Labor productivity 4.02 0.915 3.56 0.993 -0.46 0.838 -3.402 0.001** Motivating employees 3.94 0.843 3.46 0.886 -0.48 0.886 -3.537 0.000** ------4.06 0.739 3.61 0.687 -0.45 0.673 - 4.178 0.000** ------Cost Reduction goals Waist reduction 4.08 1.007 3.60 0.904 -0.42 0.758 -3.424 0.001** Production costs reduction 3.88 0.918 3.30 1.093 -0.58 0.928 -3.658 0.000** Rework reduction 3.84 1.132 3.28 1.123 -0.56 0.884 -3.832 0.000** ------3.91 0.913 3.39 0.913 -0.52 0.723 -4.116 0.000** ------Overall Internal goals 4.01 0.724 3.53 0.690 -0.48 0.632 -4.556 0.000**

11 ------Goal expectation levels: “very low expectation” (1), “low expectation” (2), “moderate expectation” (3), “high expectation” (4), and “very high expectation” (5). - Goal achievement levels: “very low achievement” (1), “low achievement” (2), “moderate achievement” (3), “high achievement” (4) and “very high achievement” (5). - * p < .05, ** p < .001 5. The Effect of Plant Characteristics on ISO-9000 Internal Benefits: Table 4 presents the results of Mann-Whitney and Kruskal Wallis tests The results show the existence of no significant effect of any of the four plant characteristics on expected and perceived benefits. Surprisingly, our findings indicates that the length of the registration period has no significant correlation with the expected or expected benefits. This result seems to contradict Brecka (1994) and Singels who showed that companies registered to the standard for longer period of time perceive greater benefits than the ones that have been just recently registered. It complies, however, with the empirical findings of Leung et al. (1999) who showed that the passage of time since registration does not have any significant effect on the perceived benefits. Jones et al., 1997, Terziovski et al. (2003) and Casadesus et al. (2005). Table (4) Expected and Perceived Internal Benefits and Plant Characteristics (Mann-Whitney and Kruskal Wallis test results) ------Plant Time since Plant Type of ISO Size Registration Age Certification ------M-W U Sign. M-W U Sign. Chi-Sq. Sign. M-W U Sign. ------Human Resources Development: Level of expectation 285.500 0.772 198.500 0.053 0.174 0.676 248.500 0.421 Perceived achievement 251.500 0.334 259.000 0.475 0.015 0.903 249.000 0.428 Gap 218.500 0.102 231.500 0.202 0.079 0.779 222.000 0.176 Cost Reduction: Level of Expectation 243.000 0.250 282.000 0.799 0.491 0.484 235.500 0.280 Perceived achievement 241.000 0.238 289.000 0.912 0.134 0.714 209.000 0.107 Gap 289.000 0.821 281.000 0.779 0.381 0.537 268.500 0.683 Overall Internal Benefits: Level of Expectation 280.000 0.691 227.500 0.179 0.505 0.477 283.500 0.927 Perceived achievement 229.500 0.161 274.000 0.681 0.011 0.917 224.000 0.194 Gap 269.000 0.535 284.000 0.832 0.353 0.553 255.000 0.500 ------a. Mann-Whitney Test b. Kruskal Wallis Test

6. ISO-9000 internal expected goals as predictors of its perceived achievement:

Table (5) The level of association between Goal Expectations and goal Achievement (Pearson Correlation Between factor scores) ------Perceived Effects ------Human Resources Cost Reduction Overall Internal

12 Expected Benefits Development Reduction Effect ------Human Resources Development 0.475 0.000** 0.289 0.046* 0.869 0.000** Cost reduction 0.359 0.010* 0.687 0.000** 0.919 0.000** Overall Internal Expectations 0.458 0.001** 0.580 0.000** 0.587 0.000** ------* p < .05, ** p < .001

The above-reached level of association between goal expectation and goal perceived benefits reveals the possibility of having a causal relationship between both variables. Therefore, several linear regression models were formulated using level of perceived achievement as dependent variable and level expectation as independent variable. Results, in Table 6, shows that the level of expectation of “Human Resources Development” and “Cost reduction” benefits resulted from ISO-9000 certification is a good predictor of the “Human Recourses Development” perceived benefits. Although r squared is relatively low (0.226), the model is significant (0.002). Similarly, “Cost reduction” expectation is a predictor of “Cost reduction” perceived achievement where R- squared is 0.477 and the significant level of the model is 0.000. In the two models, however, “ Cost reduction” expectation has no significant effect on “Human Resources Development” perceived achievement and “Human Resources Development” level of expectation has no significant regression with “Cost Reduction” perceived benefits. As argued by Dick, 2000, the motive for seeking certification seems to be an important predictor of (perceived) performance.

Table (6) Goal Expectations as Predictors of goal Achievement (Regression Analyses Results) ------Independent Variables ------Human Resources Cost Reduction Overall Internal Dependent Variables Development Effect Effect Effect ------Constant 3.625 3.393 3.509 Human Resources Development “Expectation” Coefficient 0.303 0.137 0.220 t 3.542 1.425 2.664 Sign. 0.001** 0.161 0.011* Cost reduction “Expectation » Coefficient 0.094 0.615 0.355 t 1.102 6.391 4.295 Sign. 0.760 0.000** 0.000** ------Model Rsquared 0.226 0.477 0.352 F 6.879 21.438 12.773 Sign. 0.002** 0.000** 0.000** ------

13 - The two factor scores resulted from the factor analysis process of the eight internal goals are used as the two dependent variables in the three regression models. - Based on Kolmgorov-Smirnov test results, the three dependent variables were normally distributed. Their K-S Z and Sign. levels are 0.888 (0.409), 0.974 (0.299), and 0.577 (0.894) respectively.

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