The Value of Accredited Certification
ISO 9001 and ISO 14001 are among the best known standards
published by the International Organization for standardization.
These international management system standards have been
implemented by more than a million organizations in 175 countries.
But many more organizations that could benefit from implementation
of management system standards have yet to do so, even though
there are compelling reasons to do so.
ISO 9001, ISO 14001, and other management system standards can
provide a solid foundation on which to build an organization that
can withstand the test of time and challenges of the marketplace.
The principles of the standards can help involve and unite
employees in working toward a shared goal. And implementation of a
certified management system can be a source of employee pride and
provide a competitive marketing and sales edge.
For a low fee, the standards give organizations proven ideas,
techniques, and principles that most could not afford to research
on their own. And the immediate and long term benefits of
certification can far outweigh the costs. In addition to increasing
customer confidence in an organization, an accredited certification
can help the organization operate more efficiently.
Recent Research
Here's an overview of some recent research on the impact of
management system implementation and certification:
In this the first large-scale study to examine the effects of
ISO 9001 on employee outcomes such as employment, earnings, and
health and safety, David I. Levine of the University of California
at Bekeley and Michael W. Toffel of the Harvard Business School
analyzed a matched sample of nearly 1,000 companies in California.
ISO 9001 adopters subsequently had far lower organizational death
rates than a matched control group of non-adopters. Among surviving
employers, ISO adopters realized higher rates of growth of sales,
employment, payroll, and average annual earnings. Injury rates also
declined slightly at ISO 9001 adopters, although total injury costs
did not. The paper describes implications
for managers and public policy. Key concepts
include:
• Companies that adopt ISO 9001 subsequently grow faster in
sales, employment, payroll, and average annual earnings than a
matched control group. ISO 9001 adopters are also more likely to
remain in business.
• ISO 9001 adopters subsequently became more likely to report
zero injuries eligible for workers' compensation. However, there is
no evidence that a firm's total or average injury costs improved or
worsened subsequent to adoption.
Michael W. Toffel of the Harvard Business School conducted one
of the first evaluations to determine whether a voluntary
management program that features an independent verification
mechanism is achieving its ultimate objectives. Using a sample of
thousands of manufacturing facilities across the United States, he
found evidence that ISO 14001 has attracted companies with superior
environmental performance, and that adopters subsequently improve
their environmental performance. These results suggest that robust
verification mechanisms such as independent certification may be
necessary for voluntary management programs to mitigate information
asymmetries surrounding management practices. Implications are
discussed for the industry-associations, government agencies, and
the non-governmental organizations that design these programs, the
companies that are investing resources to adopt them, and those
that are relying on them to infer the quality of management
practices.
Survey of ISO 14001 Certified Companies
Researchers at the University of Pennsylvania's Wharton Risk
Management and Decision Processes Center found that most of the ISO
14001 certificate holders responding to a national survey reported
a relatively quick payback time on their investment. The survey
data indicate that doing a thorough job up front in identifying
environmental aspects and testing them for improvement leads to the
bottom-line benefits that organizations expect from certification.
Many organizations experienced a two-year financial payback, and
some experienced a one-year return. The impact of internal gains in
areas such as employee awareness, management awareness, and
management involvement in environmental affairs was even greater,
indicating that ISO certification streamlines a facility's
management system to produce long-term benefits. The Wharton survey
was developed with input from ANAB and QSU Publishing Company.
Other Resources
Certification, registration, accreditation - the jargon of
conformity assessment can be confusing. This white paper on the
value of accredited certification covers the basics and then
some.