1.Write a short literature review of at least ten academic sources relevant to your topic. Any source including books, journal articles are acceptable, as long as they are relevant. You can also use a particular website for some information. If websites are used they will be in addition of the ten academic sources.
Purpose for the report
The main purpose for this report was to develop understanding of the determinants of adopting ISO 9000 and the impacts of adopting it on the financial performance on the companies.
What is ISO 9000
This is the quality management system developed to assist organizations to meet the customers and stakeholders’ needs when meeting the regulatory and statutory requirements in relation to the product services.
ISO is an acronym for International Standards for Organizations
ISO 9000 was developed and introduced in the year 1987 Since its introduction over 1 million of firms have registered with ISO 9000 in over 187 countries. It outlines the management strategies for quality management of the firms The management outlines were directed towards meeting the customers’ desires through improving the quality of products. Can be applied by any organization irrespective of the size of the firm and not specific for any organization
The two specific objectives met by the report were
; To evaluate the effects of adopting ISO 9000 in the financial performance of the service firms
To evaluate the importance of certification of the firms with ISO 9000 on their management
Literatures show that financial performance of the firms had improved since their certification with ISO 9000
ISO 9000 component effects are related to the achievements of the firm’s financial benefits
Indirect methods through conceptual formwork are applied for measuring the financial performance
Majority of the ISO 9000 welfares are external in nature instead of internal
Adoption of ISO 9000 by the companies should be for development purposes for maximum profits
Census method was used by the National Bureau Statistics of China to collect data from the service firm population
Data collection technique
The population covered by the census was 5717 companies
Both certified and uncertified companies with ISO 9000 were censured
Census covered a period from 2004 to 2008
Collected data was entered in excel organized and transferred into SPSS for data analysis
Quantitative data analysis methods were applied such as descriptive statistics i.e. mean and standard deviation to visualize the data properties
Inferential statistics used in the report were Pearson’s correlation to check for the correlation between selected attributes and multivariate regressions analysis was used to check for the effects of the independent variables such as (Kstate, Kother, ROS, ROA, FDIpercent and agefirm) on the dependent variable Kpaid in understanding the firm’s financial performance and to draw conclusion from the model outcome.
Discussion and managerial advises
The number of companies being registered by ISO 9000 increased from 2004 to 2006
Profits recorded by certified companies were more compared to those earned by the uncertified companies.
From the results, the management board were advised to register their companies with ISO 9000 for better financial performance if not registered.
Managers were as well advised to put more efforts on strategies and activities that will increase the amount of sales for profit maximization due to strong positive correlation shown from the report results by sales and profits
The report did not outline the steps that were supposed to be undertaken by the companies that had not been registered with ISO 9000 and therefore the future research should be focused on this area to help the firms willing to join ISO 9000 for financial benefits since this was not outlined in this report.
Future research should address the effects of certification of the firms with updated versions of ISO 9000 since this report only discussed the effects of age of certification of the firms with ISO 9000 and tested for its effects on the total capital in the model built.