BUACC5931 - Research and Analysis: ISO 9000 Certification in China

This report provides an in-depth analysis of ISO 9000 certification adoption in China, focusing on the interplay between stakeholder pressures, internal and external motivations, and overall business efficiency. The study examines the approaches of Chinese organizations towards ISO standards, highlighting the varying motivations behind certification, from customer demand to genuine quality improvement goals. The research includes recommendations for KEMA Quality, suggesting strategies for market niche identification, maximizing management skills, and leveraging existing networks for expansion and information gathering. The methodology involves a mixed-method approach, combining surveys and in-depth interviews to gather data on the motivations and benefits of ISO 9000 certification within the Chinese context. The findings reveal correlations between sales, profit, equity, and capital from overseas, as well as the educational levels of employees. The report also addresses limitations such as language barriers and the use of sampling techniques, suggesting improvements for future research. The report also contains descriptive and inferential statistics to support the findings and discussions.

Executive summary
The study involves four causal relations which include relations between “stakeholder’s
pressures” and benefits from external, between benefits from external and motivation from
external, between motivation from internal and efficiency from internal as well as between
internal motivation HR and processes of management (Wiengarten et al, 2017). Despite the fact
that there are four causal relations there exist another relation between external motivation and
orientation. Based on the analysis that have been carried, Chinese organizations approaches ISO
standard certification in several ways, some companies produce quality goods due to demand
from customers and the market whereas others are spearheaded by genuine objective on
improving quality. From the analysis that has been carried out, we recommend the following;
 KEMA quality need to find the niche in the market for it to succeed in China; and this
can only happens if organizations recognize the importance of maximizing the
management skills.
 The use of money and extra value should be expressed by KEMA Quality for different
selling point.
 For network expansion KEMA Quality need to use its various existing connection in
most countries.
 They should as well use the clients to broaden their network.
 Furthermore, for the information about environmental conditions they should as well use
their network.

Introduction
Background
China is one of the countries in the world which has experienced rapid growth in its economy,
this growth have influenced many international businesses in decisions making. Despite the fact
that the country is of more benefits to international business; there is the condition to supervise
the quality. This is vital because the nation has an exceptional size which affects significantly a
number of industries, moreover we can’t run away from the fact that people all over the world
have always perceived any labeled “made in china” to be of poor quality and inexpensive
product. Chinese companies are working through thick and thin to ensure they produce
expensive and quality products to their export partners to eliminate the perceptions from the
peoples minds (Du et al, 2016). This can only be achieved if the body that is the certification of
management system is independent. The certification of management system is a body whose
function is to monitor the structure of management of any organization and ensuring that good
qualities are produced at the end. The body also called ISO 9000 series deals with good
management and mainly the customers’ requirements and satisfaction. Furthermore, its ensures
that the companies continuously achieve their objective as they operate. Not only do the scarce
information of the understanding of Chinese organizations based on ISO 9000 certification,
influence companies interested in Chinese market but also affects its internationalization
negatively. The fact that the Chinese companies have experienced fast growth in the economy
has affected the strategy of several organizations in United States as well as in Europe. A good
example of such bodies is the KEMA Quality, which is a business unit of KEMA NV and its role
is to ensure and preserve the quality of products and processes. This body have customers whose
number have increased multinational and moved with their production skills to China (Du, Yin $
Zhang, 2016). In addition, the body has further constructed testing laboratories and offices in

some parts of China. The offices assist in ensuring that the products are certified this is done
after testing and system certification.
Objective
The main objective of this study is to aid both practitioners and academic researchers in knowing
the relationship between adoption of ISO 9000 certifications by the certification management
system and other factors in China’s firms. The study will describe the Chinese context and its
benefits in the process of management system. The studies further have benefits and description
of different wheels as well as the role in Chinese industries such as storage and transportation,
telecommunication, software industries and etc.
Literature review
Factors for Adoption of ISO standards
The ISO 9000 series was introduced in1987 and since its introduction a number of research
papers have been published on the topic “motivational factors for obtaining of ISO certification”.
Based on this study, the internal factors such as profitability and efficiency, low cost, good
quality as well as the external factors such as pressure from customers have been addressed
(Fikru, 2014). The ISO 9000 series of standards has risen to a major prerequisite for getting into
a broader market. The initial study work on the reasons for getting ISO certification standards,
which indicates that the external factors are greater than the internal factors (Fikru, 2016).
However there are those who claim that the adoption of ISO 9000 certification conditions are
driven internally (Bowler et al, 2017). The adoption depends on the unique organizational
resources of the company. The ISO 9001 certification is the starting point for good quality and
low cost and its performance require a valid financial resource, which varies from $ 10,000 to $
300,000. Since the improvement from this certification is arguable, the external motivations are

very exciting (Pekovic, 2010). Few but not extremely scarce, are the research work on Bulgaria
which is a former communist economy. The ISO certification comprises of motivational factors
such as internal and external factors, the internal factors enables the quality of the product while
the external factors focuses on the image of the organizations (Fikru, 2014). In this case of
Bulgaria, there are claims that there are no better researches in the area of good management and
ISO conditions. This might be as a result of relatively small size which is approximately 111,000
kilometers and its population is approximately 7 million based on the estimate carried out by the
National Statistical Institute of Bulgaria in the year 2013. The empirical research carried out with
a small sample size of 15 Bulgarian industries working in the transportation firm. This clearly
shows that motivation for ISO 9001 certification is in relation with good management system
(Castka et al, 2016). Moreover, another research was carried out and it analyses the adoption of
management standards in Bulgaria couriers, which suggest that the companies that don’t possess
a valid certification are less competitive compared to those with certificate on the European
market (Bowler et al, 2016).
Methodology
The study is based on the survey and interviews which is an example of a mixed method
approach. For instance, based on the proper literature review, we carried our primary study work
with in-depth interviews this was during the National Bureau of Statistics of China conducting
economic census of the service industries. The reason of the in-depth interview was to ensure
sufficient information on the motivation for ISO 9000 certification that is specific within the
China’s context and their relation to external and internal benefits. In this survey, a standard
questionnaire was developed by the National Bureau of statistics of China based on their
experience in the area of ISO 9000 certification in China. The questionnaire contained the

questions that each respondent was to answer then results were to be entered in SPSS for
analysis. Questionnaires were used in situations of large samples size because it saves time and
furthermore it’s less costly.
Analysis and findings
Descriptive statistics
The analysis on some of the characteristics will be carried out where the percentage, frequency,
measure of central tendency such as mean, median and mode and measure of dispersion such as
variance, standard deviation will be analyzed.
Table1
Statistics
master and
doctor bachelor diploma high school other return on sales return on asset
N Valid 5717 5717 5717 5717 5717 5717 5717
Missing 0 0 0 0 0 0 0
Mean 1.38 11.85 12.92 12.26 6.54 .1911 .2236
Median .00 4.00 7.00 5.00 .00 .1700 .1550
Mode 0 0 0 0 0 .24 .04a
Std. Deviation 5.688 28.453 24.306 31.290 25.980 .12397 .20858
Variance 32.358 809.600 590.775 979.065 674.963 .015 .044
a. Multiple modes exist. The smallest value is shown
From the table 1 above it is observed that most firms in China employs more people with
diploma and high school education as this is indicated using their mean which is 12.92 and 12.26
respectively. Few of these companies’ employs people with master or doctor since there mean is
1.38 which is very low.

Graph 2
From graph 2 above its observed that most companies adopted ISO 9000 certification in the year
2006 this is because it has the highest count of 112 whereas the year 2004 had 55 count of the
companies that adopted ISO standards.
Inferential statistics
In this case the analysis will be conducted based on the relationship between variables and the
methods used are chi-square, Pearson’s r, t-test and ANOVA test.

Correlations
sales profit equity
capital from
overseas
sales Pearson Correlation 1 .762** .468** .184**
Sig. (2-tailed) .000 .000 .000
N 5717 5717 5717 5717
profit Pearson Correlation .762** 1 .499** .189**
Sig. (2-tailed) .000 .000 .000
N 5717 5717 5717 5717
equity Pearson Correlation .468** .499** 1 .315**
Sig. (2-tailed) .000 .000 .000
N 5717 5717 5717 5717
capital from overseas Pearson Correlation .184** .189** .315** 1
Sig. (2-tailed) .000 .000 .000
N 5717 5717 5717 5717
**. Correlation is significant at the 0.01 level (2-tailed).
From the correlation table above it’s observed that the Pearson correlation between the sales and
profit is 0.762 and its p-value is 0.000 which is less than 0.01 hence the correlation is significant.
Therefore the variables sales, profit, equity and capital from overseas are all correlated.
Discussion and Recommendation
From the findings we also notice that there exist a correlation between the sales (revenue) and
the profit made by the companies. This is because as sales increases the profit made by these
firms also increases. I would recommend that for profit to be made by any firm there should also
be sales.
From the findings it is noticed that most companies in China employs people with diploma,
bachelor and high school education this is because these are the people who have sufficient
knowledge and skills to be used to operate these firms. Furthermore these kinds of people are not
too expensive and therefore this helps the companies to reduce the cost and increase the revenue.

Limitations and directions
Companies with a positive attitude of producing good quality are willing to participate.
Many companies in which in-depth interviews are carried are not representative.
The language barrier creates a communication problem and this hinders the selection of the
companies to participate in research.
This study employs the use of sampling technique, therefore the results and analysis that was
done and presented were only valid for the sample. Hence for its effectiveness the general
population of China ought to be considered.
The risk of getting unrealistic data, this is because the respondents answering the questionnaire
give answers based on social desire.
Most Chinese companies employ many people and therefore getting the right person who can
give accurate answers becomes difficult.
The above limitations can be improved as follows;
The language should be kept simple and furthermore the respondent should know the intention of
the interview or research.
The in-depth interview should be accurately prepared to reduce biasness.

References
Wiengarten, F., Humphreys, P., Onofrei, G., & Fynes, B. (2017). The adoption of multiple
certification standards: perceived performance implications of quality, environmental
and health & safety certifications. Production Planning & Control, 28(2), 131-141.
Du, Y. Z., Yin, J. L., & Zhang, Y. L. (2016). How innovativeness and institution affect ISO
9000 adoption and its effectiveness: evidence from small and medium enterprises in
China. Total Quality Management & Business Excellence, 27(11-12), 1315-1331.
doi:10.1080/14783363.2015.1075874
Fikru, M. G. (2014a). Firm Level Determinants of International Certification: Evidence from
Ethiopia. World Development, 64, 286-297. doi:10.1016/j.worlddev.2014.06.016
Fikru, M. G. (2014b). International certification in developing countries: The role of internal and
external institutional pressure. Journal of Environmental Management, 144, 286-296.
doi:10.1016/j.jenvman.2014.05.030
Fikru, M. G. (2016). Determinants of International Standards in sub-Saharan Africa: The role of
institutional pressure from different stakeholders. Ecological Economics, 130, 296-307.
doi:10.1016/j.ecolecon.2016.08.007
Bowler, K., Castka, P., & Balzarova, M. (2017). Understanding firms’ approaches to voluntary
certification: Evidence from multiple case studies in FSC certification. Journal of
Business Ethics, 145(2), 441-456.
Pekovic, S. (2010). The Determinants of ISO 9000 Certification: A Comparison of the
Manufacturing and Service Sectors. Journal of Economic Issues (Taylor & Francis Ltd),
44(4), 895-914. doi:10.2753/JEI0021-3624440403

Castka, P., & Corbett, C. (2016). Adoption and diffusion of environmental and social standards:
The effect of stringency, governance, and media coverage. International Journal of
Operations & Production Management, 36(11), 1504-1529.