Divesh S. Sharma
Nanyang Technological University
Abstract: This study explores the association between ISO 9000 certification and financial performance at the organizational level in a mature quality initiative market. The study hypothesizes that ISO 9000 certification is associated with improvements in financial performance. Three financial performance measures, EPS, Profit Margin and Growth in Sales, are used to test the research hypothesis for a sample of 70 listed companies using six years of longitudinal data. The most significant contribution of the study is its design that enables testing the extent of improvement in financial performance following ISO 9000 certification. The results of the study are consistent with the hypothesized effects; that ISO 9000 certification is associated with gains in financial performance. The study also adds to the much needed literature on quality initiatives and financial performance.
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