Research Methods and Statistics Case Study 2022

Research methods and statistics
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23rd September 2019

Executive summary
The aim of this study was to investigate the impact of ISO 9000 certification on how the firms
performs in relation to their profits and sales. A census economic data from China was used to
analyze the effect of ISO 9000 certification. The key results are as follows;
 ISO 9000 certified firms have higher average sales as compared to the non-ISO 9000
certified firms.
 ISO 9000 certified firms have higher average profits as compared to the non-ISO 9000
certified firms.
 There is significant variation in the average sales made by the firms across the different
industries/sectors.
 Telecommunication is the best performing sector in terms of the sales while Specialized
technology services is the least performing when it comes to the average sales.
Based on the key findings, it is recommended that the management of the firms strive to ensure
that their firms are ISO 9000 certified as this will boost their businesses and performance thereby
putting them at per with other players in the market.

1.0 Introduction
In this time of modern globalization, lots of pressure pile up for firms to consistently innovate
and advance in new products and to improve on the existing goods and services. There is need to
come up with plans to minimize technical trade barriers, have greater infrastructural
developments and standardize business processes (Costa & Lorente, 2017). In this regard, the
International Organization of Standardization (ISO) aims to advance institutionalization and
encourage the worldwide trade of products and enterprises, and participation in fields, for
example, scholarly, logical, mechanical and monetary exercises. In the recent past, there has
been wide application of the ISO 9000 certification on quality management and system
standards. More than 1 million firms/facilities in more 189 countries had adopted ISO 9000
certification (Chua, Goh , & Wan , 2012). There is however a growing concern among
practitioners as well as academicians on the relationship that exists between adoption of ISO
9000, and possible factors such as profitability and sales of the firms (Pekovic, 2010).
The eagerness to actualize ISO 9000 confirmation might be identified with assumptions
regarding improved quality and to those factors viewed as critical to aggressive achievement and
upper hand (Zaramdini, 2016; Saraiva, Sampaio, & Rodrigues, 2012; Yamada, 2010).
This study sought to investigate the relationship that exists between ISO 9000 certifications and
the sales as well as profits made by the firms. The study utilizes the data from China’s National
Bureau of Statistics that conducted a survey (Economic Census survey) of the service firms in
2008. A total of 5717 firms ranging from different industries/sectors (research, software,
computer services, telecommunications etc.) were included in the study.

1.1 Research questions
In particular, this study sought to answer the following research questions:
i) Does ISO 9000 certification increase the sales margins of the firms?
ii) Does ISO 9000 certification increase the profit margins of the firms?
1.2 Research objectives
This study sought to investigate the following objectives:
i) To investigate whether there is significant difference in the sales margins for ISO
9000 certified firms and non-ISO 9000 certified firms.
ii) To investigate whether there is significant difference in the profit margins for ISO
9000 certified firms and non-ISO 9000 certified firms.
2.0 Literature Review
2.1 Introduction
Previous studies have been done around the globe including China to investigate whether firms’s
ISO 9000 certification yields good results (Yamada, 2010). Some of the studies concluded that
ISO 9000 certification leads to improvement in the internal processes that lowers the production
costs while boosting the productivity of the firms (Costa & Lorente, 2017). Other studies
established that ISO 9000 certification is crucial in maintaining the firm’s market share as the
need for quality products gains momentum among the customers (Aarts & Vos, 2011). Some
other studies have however established that certification has no effect on firm’s operations
(Zaramdini, 2016). The present study seeks to present a detailed objective view of the ISO
9000 certification effect on profits and sales.