BUACC5931: ISO9000 Adoption and Factors in China’s Service Industry

This report investigates the adoption of ISO 9000 and its relationship with various factors in China's service industry, based on data from the National Bureau of Statistics of China. The study reveals that ISO 9000 certified companies exhibit higher profits and sales compared to their non-certified counterparts. The research employs both descriptive and inferential statistical methods, including independent t-tests, to analyze the data. Key findings highlight the need for increased national efforts to promote ISO 9000 certification among Chinese companies and stricter government regulations to ensure service quality. The report concludes with limitations and suggestions for future research, including expanding the study to a more diverse sample across different countries and income levels. Desklib provides access to this report and other study resources for students.

Adoption of ISO9000 and its Relationship
with other Factors in China’s Service
Industry
Student name:
Date:

Executive summary
Major Findings include;
• The profit made by the ISO9000 certified companies was higher than that of the
non-ISO9000 certified companies
• The sales made by the ISO9000 certified companies was higher than that of the
non-ISO9000 certified companies
• Only a very small proportion (8%, n = 460) of the companies studied have so far
undergone ISO9000 certification.
Major recommendations include;
• There is need for an intensive national drive and sensitization of various companies
to undergo ISO9000 certification.
• The government to put strict and adequate measures for companies being
registered to ensure they are ISO9000 certified so as to ensure quality of service
offered to the citizens

Introduction
Background of the research
• The ISO 9000 series of quality management systems standard has been widely applied all over the world since its
introduction in 1987.
• Both academics and practitioners are interested in understanding the relationship between adoption of ISO 9000, and other
factors (Christmann & Taylor, 2006).
Research purpose
• This paper examines the ISO9000 certification impact on company's market performance basing on the Chinese companies
Research Questions
• Is there is significant difference in the profit made by the ISO certified companies and the non-ISO certified companies?
• Is there is significant difference in the profit made by the companies with overseas investment and those without overseas
investment?
• Is there is significant difference in the sales made by the ISO certified companies and the non-ISO certified companies?
• Is there is significant difference in the sales made by the companies with overseas investment and those without overseas
investment?
• What factors affect the company profits?

Literature Review
The ISO 9000 group of principles has turned into a primary necessity for entering
the worldwide market (Sun, 2000; Abraham, Crawford, Carter, & Mazotta, 2000;
Almeida, Caten, & Gutterres, 2009), subsequently some of the past research
takes a shot at the reasons behind getting ISO certification argue that the
external factors are better than the internal factors (Casadesús & Karapetrovic,
2005; Dongmo & Onojaefe, 2013; Heras-Saizarbitoria, Arana, & San , 2010)

Description of the methodology
• In 2008, the National Bureau of Statistics of China conducted an Economic Census
of the service firms. A total of 5717 companies were selected for this study.
• The sampling and data collection was based on the records from the registrar of
companies.
• For analysis, both descriptive and inferential analysis were employed to analyse
the data.

Analysis of the findings
Descriptive statistics
Statistics
sales profit age of
company in
years
N Valid 5717 5717 5717
Missing 0 0 0
Mean 11698.57 2067.97 7.62
Median 4205.00 692.00 6.00
Mode 1500 300 2
Std. Deviation 32873.609 7158.417 7.074
Skewness 11.328 19.254 3.540
Std. Error of Skewness .032 .032 .032
Kurtosis 188.002 602.738 17.849
Std. Error of Kurtosis .065 .065 .065
Minimum 1000 17 2
Maximum 869176 296176 61
Percentiles 25 2273.50 313.00 3.00
50 4205.00 692.00 6.00
75 8953.50 1542.00 9.00
• As can be seen, the average sales for all
the companies in the sample was found to
be 11698.57 while the average profit was
2067.97.
• The maximum profit made by the
companies was 296176 while the
minimum profit was 17.
• In terms of company age, the average age
of the companies was found to be 7.62
years with the oldest company being 61
years old and the youngest company
being 2 years old.

Descriptive statistics Cont’
In terms of the industry, business services
were leading with almost half the
companies sampled being in the business
services (48%, n = 2722). Specialized
technology services came second with
21% (n = 1200) while the rest of the
sectors had less than 10% shares.

Analysis of the findings
Inferential statistics
We performed an independent t-test in order to compare the average profits for ISO9000
certified companies and non-ISO9000 certified companies. Results showed that the average
profits for ISO9000 certified companies (M = 4384.67, SD = 9237.04, N = 460) was significantly
different from the average profits for the non-ISO9000 certified companies (M = 1865.26, SD
= 6911.27, N = 5257), t (5715) = -7.271, p < .05, two-tailed. Essentially the results showed that
the average profits made by the ISO9000 certified companies was significantly higher than
that of the non-ISO9000 certified companies.

Discussion and managerial advises
• In this study we sought to analyse the relationship between Adoption of
ISO9000 with other factor players in China’s service industry.
Based on the research findings, the following recommendations are made;
• There is need for an intensive national drive and sensitization of various
companies to undergo ISO9000 certification.
• The government to put strict and adequate measures for companies being
registered to ensure they are ISO9000 certified so as to ensure quality of
service offered to the citizens

Limitations and directions for future research
• This study is limited to the fact that the study only based itself on the companies
in China alone. Future study should focus having a varied sample from different
countries.
• The sample could be stratified into low income countries and developed and
countries.
• This will help remove out any bias that might arise as a result of heterogeneity of
the data from different countries.

References
• Almeida, M., Caten, C., & Gutterres, M. (2009). Evaluating ISO 9001:2000 Certified and NonCertified
Organizations in Brazilian Leather-Footwear Chain. Brazilian Journal of Operations & Production
Management, 6(2), 51-73.
• Casadesús, M., & Karapetrovic, S. (2005). Has ISO 9000 lost some of its luster? A longitudinal impact
study. International journal of operations & production management, 25(6), 580-596.
• Dongmo, C., & Onojaefe, D. (2013). Using customer satisfaction to understand implementation benefits
of the ISO 9001 quality management system. Business Management Dynamics, 3(3), 1-9.
• Heras-Saizarbitoria, I., Arana, G., & San , M. (2010). An Analysis of the Main Drivers for ISO 9001 and
other Isomorphic Metastandards. Review of International Comparative Management, 11(4), 562-574.