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Quality management results in ISO 9000 certified Spanish firms

Juan José TaríJosé Francisco Molina
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European quality
management
Quality management
results in ISO 9000
certified Spanish firms
Juan Jose Tarõ and
Jose Francisco Molina
The authors
Juan Jose Tarõ and Jose Francisco Molina are Senior
Lecturers in Business Management, both at the University
Downloaded by Universite Laval At 06:52 07 April 2016 (PT)
of Alicante, Alicante, Spain.
Keywords
Quality management, ISO 9000, TQM, Factor analysis,
Spain
Abstract
Many firms have started to realise the benefits of total
quality management. In this respect, quality management
improves internal and external quality management
performance. This philosophy enhances customer
satisfaction, employee satisfaction and increases business
results. Therefore, the results of most quality
management practices show that firms implementing
quality systems achieve significant improvement in
customer satisfaction, employee satisfaction, social
impact and business results. The focus of this study was
to analyse and evaluate quality management results in
ISO 9000 certified firms, in order to identify the key
results of TQM and to classify firms. For this purpose, we
use a factor analysis and a cluster analysis.
Electronic access
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The TQM Magazine
Volume 14 . Number 4 . 2002 . pp. 232±239
# MCB UP Limited . ISSN 0954-478X
DOI 10.1108/09544780210429843
232
Introduction
The globalisation of the marketplace has
increased competition worldwide. In this
respect, many companies have started to
realise the benefits of the quality revolution
and in particular of total quality management
(TQM). TQM is a management philosophy
that emphasises both the needs to meet
external and internal customer's needs and
expectations and the importance of doing
things right first time (Al-khalifa and
Aspinwall, 2000). Good quality practices
resulting in the improvement of internal
quality performance will lead to the
improvement of external performance, such
as competitive market position, profitability,
customer satisfaction (Deming, 1982, 1986).
Therefore, the goals of most quality
management practices is to improve internal
and external quality management
performance (Rao et al., 1999; Escanciano
et al., 2001). It is a quality improvement
philosophy that enhances customer
satisfaction, employee satisfaction and
increases business results (Laszlo, 1997). The
European Foundation for Quality
Management model (EFQM model) shows
that firms implementing this model achieve
significant improvement in customer
satisfaction, employee satisfaction, social
impact and business results (EFQM, 2000).
In this sense, a successful implementation
of a quality system may generate, on the one
hand, a differentiation, and on the other
hand, low costs (Belohlav, 1993; Grant,
1995), which is why it is a suitable start
towards total quality (Askey and Dale, 1994;
Bradley, 1994; Stephens, 1994; Meegan and
Taylor, 1997; van der Wiele et al., 1997;
Brown et al., 1998; Kanji, 1998; Krasachol et
al., 1998; McAdam and McKeown, 1999).
The focus of this study was to analyse
and evaluate quality management results in
ISO 9000 certified firms, in order to identify
the key results of TQM and classify firms. For
this purpose, a factor analysis and a cluster
analysis have been performed on the answers
supplied by 106 certified firms in the Alicante
area (eastern Spain).
Our paper is structured as follows: first,
there is an explanation of the methodology we
have used, followed by a section containing
the results of our research. Finally, a few
conclusions are suggested.
 Quality management results in ISO 9000 certified Spanish firms
Juan Jose Tarõ and Jose Francisco Molina
Methodology
Sample
In order to achieve our objective, we selected
as the population for our study those firms
carrying out their activity in the Alicante area
(eastern Spain) which have received the ISO
9000 certificate, between the moment the
certification process started in this area
(1993) and February 1999. In this way, the
total population (number of certificates) was
175. However, we eliminated two
multinational consultancy firms which were
not included in the study. In addition to this,
it was detected that there were four firms with
more than one certificate, and therefore all
these cases (nine) were regarded as four firms
(four answers), for the quality control tasks
were performed by one person. Similarly, it
was observed that in some firms with different
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certificates, belonging to the same group, the
same person was responsible for the quality
activities, and therefore, there was one single,
valid interview for all of them; this led us to
consider it as one single answer, and one
single firm (22 certificates corresponding to
eight answers). After these considerations, the
actual number of firms in the population was
154.
After finishing the data collection from the
154 firms (October 1999), 12 of them were
impossible to obtain, and thus the final
population considered was 142, the number
of answers being 108, which represents 76.06
per cent. However, two answers were not
regarded as valid due to incomplete data;
therefore, the number of cases processed
statistically with the SPSS software was 106
firms. The characteristics of these 106 firms
are those shown in Tables I and II.
Data collection
While the database was being selected, a
questionnaire was designed meeting the
objectives that had been set. With these
questions we attempted to find out about the
results of quality management.
The process of developing the
questionnaire finished with a pilot survey,
which was used to modify and eliminate a
number of variables, until the final
questionnaire was designed. Experts on the
subject were consulted, to ensure that the
questions were properly phrased, and the
suitability of the questionnaire was tested on a
sample of firms (Madu, 1998). In this way,
233
The TQM Magazine
Volume 14 . Number 4 . 2002 . 232±239
this test consisted of a first revision of the
questionnaire (pre-test) with four people (an
academic, a small-medium firm manager and
two quality consultants), to ensure a suitable
coverage of the domain of each construct, and
a second test with the ten first firms studied,
selected at random, which allowed us to
modify and delete some variables.
The data were collected by means of a
structured personal interview, carried out face
to face, based on a closed questionnaire, plus a
set of open questions which allowed us to
clarify certain points. In this way, the process
started with a pilot test in June 1999, which
allowed us, as has been discussed before, to
modify the initial questionnaire; between June
and October 1999 we conducted the
interviews with 108 firms that agreed to
participate. The questionnaire was answered
by the person in charge of the quality area, for
these reasons: first, he or she plays an active
role in the quality strategy; second, he or she
possesses the knowledge required to answer
the questionnaire, and given his or her training
and knowledge on the subject, considering
that these firms had quality systems, this
would allow a better understanding of the
questions; and third, in similar studies, the key
person to interview is the quality manager.
Variables
Starting from here, our measurement
instrument is based on the EFQM model and
on a review of the literature. We selected the
constructs considering mainly the results
defined by the EFQM model, defining the
items from those fixed in that model and on
the empirical work by Powell (1995) and
Grandzol and Gershon (1998). Once the
variables were defined, they were tested
through a pilot test, which allowed us to
eliminate some items, down to a final number
of 17, grouped into four results of TQM,
measured in a seven-point scale (Table III).
Among these categories, we consider the
customer satisfaction factor used by Grandzol
and Gershon (1998) and the construct of the
TQM program performance used by Powell
(1995); however, in both factors we have
included in the final questionnaire one item
less than in these studies, such item being
dropped in the pilot test.
Analytic procedures
First, we developed a factor analysis with the
set of 17 items of the results of TQM in order
 Quality management results in ISO 9000 certified Spanish firms The TQM Magazine
Juan Jose Tarõ and Jose Francisco Molina Volume 14 . Number 4 . 2002 . 232±239

Table I Number of certified firms according to number of employees

Number of employees
Small Medium Large
<20 20-49 50-99 100-250 >250 >500 Total
No. of firms 17 17 27 24 8 13 106
Total 34 51 21 106
Total (percentage) 32 48 20 100

Table II Number of firms per sector

Sector Number of firms (%)
Industry Manufacturing 49 63 59
Construction and contractors 14
Transport, communication and public services 15 (transport)
9 (public services)
Services Services 8 43 41
Wholesalers 6
Finance, insurance 3
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Retailers 2

Total 106 106

Table III Quality management results

Source
Customer satisfaction
1. This organisation is not concerned about collecting information from its Grandzol and
customers in Gershon (1998)
order to measure their satisfactiona
2. Customer satisfaction has historically shown improvements
3. This organisation has implemented a process to listen to and solve customer
complaints
Employee satisfaction
4. This organisation collects relevant information from employees to measure their Grandzol and
satisfaction Gershon (1998)
5. Employee satisfaction has historically improved EFQM (2000) model
6. Absenteeism is higha
7. Employee rotation is low
Social impact
8. Policies are developed to reduce and prevent health and safety risks EFQM (2000) model
9. Policies are developed to protect the environment
10. This organisation is not much actively involved in the communitya
TQM performance
11. Our financial results have been excellent Powell (1995)
12. Our quality program has increased our revenue
13. Our quality program has increased our yield
14. Our quality program has improved our competitive position
15. Our quality program has improved our performance in general
16. Our quality program has had a negative impact upon our profitabilitya
17. We could have done better (i.e. obtained better financial results) without a
quality programa
Note: Initial items used to measure the results of quality management. Out of these original 17 items of the
factors; a Those which were used as reverse scored

234
 Quality management results in ISO 9000 certified Spanish firms
Juan Jose Tarõ and Jose Francisco Molina
to identify the key results, based upon the
perceptions of quality managers of ISO 9000
certified firms. Second, we performed a
cluster analysis based upon the factor score
for each factor identified in previous analysis.
Survey findings
Importance of quality management
results
From the average scores obtained for the 17
items in the answers given by the 106 firms
studied, ``this organisation has implemented a
process to listen to and solve customer
complaints'' and ``our quality program has not
had a negative impact upon our profitability''
have been most valued, followed by
``absenteeism is low'', ``policies are developed
to reduce and prevent health and safety risks''
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and ``this organisation is concerned about
collecting information from its customers in
order to measure their satisfaction'', whereas
results such as ``this organisation is much
actively involved in the community'' and ``this
organisation collects relevant information
from employees to measure their satisfaction''
have been considered the least important,
which proves that many firms do not consider
the need to collect information from
employees to improve (Table IV). This
indicates that customer satisfaction is an
important result of TQM and employee
involvement is an improvement area in
ISO 9000 certified firms.
Factor analysis
From the answers given to the 17 variables by
the 106 studied firms we applied a principal
component factor analysis, eliminating factor
loads lower than 0.40 (Huarng et al., 1999).
In this respect, the initial solution is usually
difficult to interpret, which is why a rotation is
usually performed. In this case, we use a
varimax rotation.
The principal components factor analysis is
adequate (Kaiser-Meyer-Olkin measure of
sampling adequacy ˆ 0:667, Bartlett's test of
sphericity p ˆ 0:000) and we obtain five
factors which allow us to account for 60 per
cent of the total variance (Table V).
The first factor, which we have called
business results, shows higher values in firms
that believe that the quality system has had a
partial influence upon results by improving
their competitiveness and their internal
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The TQM Magazine
Volume 14 . Number 4 . 2002 . 232±239
procedures, thus generating positive effects
upon the firms.
The second factor is formed by community-
related variables, and shows greater values in
those firms concerned about reducing and
preventing health and safety risks to their
employees and the environment, and those
which take part in the activities of their social
environment. This we have called social
impact.
The third factor includes customer results
(collecting information from customers to
measure their satisfaction, this satisfaction has
historically improved and the organisation has
implemented a procedure to listen to and
solve customer complaints), and indicates
that some firms measure customer
satisfaction in a more formal manner than
mere complaints. In this way, this factor has
greater values in firms measuring the
satisfaction of their customers, and we have
called it customer satisfaction. Also, this
satisfaction level may also depend on the
employees, and for some firms it is related to a
low absenteeism, and in turn, to employee
satisfaction.
The fourth factor concerns employee
results (collecting information from
employees to measure their satisfaction and
this satisfaction has historically improved).
This dimension shows higher values for firms
collecting data from their employees to
measure their satisfaction, and thus we have
termed it employee satisfaction. It indicates
that firms gather information from their
employees in order to measure their
satisfaction in a more or less systematized
manner.
The last one is related to two indicators of
the human resources area, and shows higher
values in those firms that believe that their
employees are happy because their
absenteeism and rotation are low. This we
have termed staff indicators.
Thus, the answers given by firms to the 17
results of quality management yield a more
manageable and significant five-factor
structure, showing five dimensions of the
results created by a quality system. The most
important part is customer satisfaction,
proving that quality management is a way to
approach customers' needs and expectations,
which in turn improves business results. The
least important result is employee satisfaction,
whereas social impact has an average
importance (Table VI). This proves that
 Quality management results in ISO 9000 certified Spanish firms The TQM Magazine
Juan Jose Tarõ and Jose Francisco Molina Volume 14 . Number 4 . 2002 . 232±239

Table IV Results of TQM

Very important
Standard (rated between 5
Items Mean deviation and 7) % firms
3. This organisation has implemented a process to 6.32 0.81 96.2
listen to and solve customer complaints
16. Our quality program has had a negative impact 6.06 0.72 94.3
upon our profitability

6. Absenteeism is high 5.97 0.89 94.3

17. We could have done better without a quality 5.72 1.04 84.9
program
8. Policies are developed to reduce and prevent health 5.66 1.22 87.7
and safety risks
1. This organisation is not concerned about collecting 5.58 0.79 95.3
information from its customers in order to measure
their satisfaction
14. Our quality program has improved our competitive 5.39 0.88 82.1
position
15. Our quality program has improved our performance 5.35 0.76 91.5
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in general
7. Employee rotation is low 5.31 1.44 76.4
2. Customer satisfaction has historically shown 5.23 0.68 88.7
improvements
13. Our quality program has increased our yield 5.01 0.91 65.1
5. Employee satisfaction has historically improved 4.72 0.74 69.8
12. Our quality program has increased our revenue 4.71 0.79 55.7
11 Our financial results have been excellent 4.65 0.84 50.9
9. Policies are developed to protect the environment 4.56 1.84 62.3

10. This organisation is not much actively involved in 3.70 1.72 37.7
the community
4. This organisation collects relevant information from 3.07 1.40 18.9
employees to measure their satisfaction

TQM generate mainly customer satisfaction
and many certified firms have to improve
employee involvement. For their part,
business results have an average score which
indicates that many firms stated that their
quality system had had a low impact upon
their results, considering that they had been
working in this area for a short time (the
average was almost three years of
certification).
Cluster analysis
By applying this analysis, we use the factor
scores in previous analysis and we group firms
according to their results of TQM. For this
purpose, firstly a hierarchical method is used
(Ward's method to minimize differences
within the clusters and the square euclidean
distance) so as to identify the suitable number
of groups; then, a non-hierarchical method is
applied and validated through the analysis of
236
variance of one factor (Punj and Stewart,
1983; Hair et al., 1995; Ketchen and Shook,
1996).
In order to select the group in the
hierarchical method, we have considered the
dendogram and the change in agglomeration
coefficient. After studying the dendogram we
can identify from a minimum of two groups
(less homogeneous) to a maximum of six
groups (more homogeneous); regarding the
agglomeration coefficient, the most important
changes occur between two and four groups.
Also, the highest difference among
percentages of change occurs in three clusters;
therefore, three would be the number of
groups according to this criterion (Table VII).
This method is a very accurate one, although
it tends to indicate very few clusters (Hair
et al., 1995).
The number of groups can also be
determined by using Fisher's F statistical
 Quality management results in ISO 9000 certified Spanish firms The TQM Magazine
Juan Jose Tarõ and Jose Francisco Molina Volume 14 . Number 4 . 2002 . 232±239

Table V Rotated factor matrix of the results of TQM

Factors
Business Social Customer Employee Staff
Items results impact satisfaction satisfaction indicators
12. Our quality program has increased our revenue 0.859
11. Our financial results have been excellent 0.765
14. Our quality program has improved our 0.754
competitive position
13. Our quality program has increased our yield 0.732
15. Our quality program has improved our 0.581
performance in general
16. Our quality program has had a negative impact 0.517 0.428
upon our profitability
17. We could have done better (i.e. obtained better 0.512 0.415
financial results) without a quality program
9. Policies are developed to protect the 0.802
environment
10. This organisation is not much actively involved 0.753
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in the community
8. Policies are developed to reduce and prevent 0.704
health and safety risks
1. This organisation is not concerned about 0.782
collecting information from its customers in
order to measure their satisfaction
2. Customer satisfaction has historically shown 0.614
improvements
3. This organisation has implemented a process to 0.502
listen to and solve customer complaints
5. Employee satisfaction has historically improved 0.761
4. This organisation collects relevant information 0.757
from employees to measure their satisfaction
7. Employee rotation is low 0.708
6. Absenteeism is high 0.423 0.607

Eigenvalue 3.362 1.957 1.631 1.540 1.470

Percentage variance explained by factor 19.779 11.510 9.592 9.058 8.645
Percentage total variance explained 19.779 31.290 40.882 49.939 58.585

criterion. In this way, by considering three Table VII Agglomeration coefficient

clusters in the K-means analysis (non- Differences
hierarchical) and validating it with Fisher's F Percentage between
statistical criterion, all three factors are Number of Agglomeration change in the percentage
significant. Therefore, the best choice groups coefficient coefficient changes
statistically speaking is three homogeneous 10 225.272 7.18 ±0.25
groups which are different from one another. 9 241.438 6.92 0.06
8 258.154 6.99 2.18
Table VI Average for the results of TQM
7 276.19 9.17 1.35
Results Mean 6 301.512 10.51 0.79
Customer satisfaction 5.71 5 333.214 11.31 0.25
Staff indicators 5.64 4 370.892 11.56 ±0.62
Business results 5.27 3 413.754 10.93 2.36
Social impact 4.64 2 458.991 13.29
Employee satisfaction 3.90 1 520

237
 Quality management results in ISO 9000 certified Spanish firms The TQM Magazine
Juan Jose Tarõ and Jose Francisco Molina Volume 14 . Number 4 . 2002 . 232±239

Thus, in order to decide the number of
clusters, we may combine different methods.
Hence, we consider three groups which are
used for the non-hierarchical analysis, and we
apply a K-means cluster analysis; the study is
validated by analyzing the variance of one
factor as we observe that all three factors are
significant (Table VIII). The following stage
is the interpretation of the three resulting
clusters (Table IX).
The first group shows an important social
concern and a high employee satisfaction
compared to the other two groups. It is
formed by firms which have the best results in
the human resources area. However, their
business results are not as good as they are in
the other groups, existing significant
differences with the other groups. The second
group is formed by firms with high business
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Starting from here, we distinguish two
situations, on the one hand, the possibility of
improving the customer satisfaction in order
to improve business results, and on the other
hand, how a concern for human and social
aspects-related results do not have
repercussions on business results. This
proves certified firms do not perceive the
benefits that a high employee involvement
can generate, as we mentioned before.
Finally, there are not significant differences
between clusters depending on their size and
sector.
Conclusions
The research we propose here reflects the
empirical results of 106 firms in order to

results which is related with a high customer identify the results of TQM. Thus, the
satisfaction. The last group is formed by firms answers given by firms to the 17 results of
with low results. They show a low level in quality management yield a more manageable
social impact, employee satisfaction and and significant five-factor structure, showing
customer satisfaction compared to the other five dimensions of the results created by a
two groups. quality system. These results form a model
Thus, this classification distinguishes three allowing managers to have a better
clusters: understanding of quality management results.
(1) high business results related with high Used periodically this model may serve to
customer satisfaction (cluster 2) evaluate a firm's quality results, finding those
(2) high employee satisfaction and social areas where improvement is necessary and,
concern that however do not involve an therefore, enabling the quality management
improvement in business results (cluster effort to be planned.
1); and Once we have identified the results of
(3) low results in general (cluster 3). TQM, starting from a principle components
Table VIII Analysis validation
analysis (varimax rotation), we group firms
using cluster analysis, using factor scores. In
F Sign.
this respect, we distinguish three clusters
Factor score factor 1 21.576 0.000 which indicate the results on which firms
Factor score factor 2 11.858 0.000 focus. Thus, we identified:
Factor score factor 3 30.985 0.000 (1) a cluster where a high concern for the
Factor score factor 4 4.451 0.014 customer exists, as demonstrated by the
Factor score factor 5 18.696 0.000 customer satisfaction level, which

Table IX Factor averages and statistical tests showing differences

Means
Cluster 1 Cluster 2 Cluster 3 Levene's test ANOVA
Factors n = 20 n = 42 n = 43 F Sign. F Sign. 1-2 1-3 2-3
Business results 4.73 5.42 5.38 0.409 0.665 12.955 0.000 * *
Social impact 5.35 4.98 3.96 0.845 0.432 14.096 0.000 * *
Customer satisfaction 5.83 6.03 5.36 0.354 0.703 26.996 0.000 * *
Employee satisfaction 4.40 3.96 3.62 3.124 0.048 12.751 0.002
Staff indicators 5.85 5.19 5.95 10.497 0.000 14.775 0.001
Note: *p  0.001

238
 Quality management results in ISO 9000 certified Spanish firms
Juan Jose Tarõ and Jose Francisco Molina
involves better business results compared
to the other groups;
(2) another group with low concern for the
customer and the environment; and
(3) a cluster formed by those obtaining less
positive effects on business results due to
the quality system.
In this sense, this analysis shows that, on the
one hand, firms most concerned about their
customer are those that can improve business
results (revenue, yield, competitive position,
etc.), and on the other hand, there are no
significant differences among clusters on
employee satisfaction, which accepts the need
of these firms to improve in this area.
After these results, it is our belief that future
studies should be carried out with a larger
number of firms, and focusing on small and
medium firms, in order to corroborate these
results.
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