ISO 9001 and Small Companies: a vehicle for growth and maturation

Magazine article, 1993

Small and large corporations have met an increasing demand for quality certification according to the ISO 9000 regulations. The ISO 9001 is the most comprehensive of the standards providing guide-lines for third party audits and certification of supplier firms, which besides manufacturing are also involved in development of the products supplied. The standard presribes that the supplier firms are required to have a documented quality system including descriptions of work tasks, report routes and document. The value of this certification process for a small company has been questioned, see e.g. Bergman & Klefsjö (1991). The documentation process has been seen as a waste of time, putting a lot of effort on producing documents instead of practical work to improve quality. It is well-known that small firms that grow rapidly might stumble for various reasons, including an increasing difficulty for the entrepreneur to keep track of every detail in combination with a limited ability for delegating authority. The ISO 9001 provides a route to more structure, hence there seems to be a potential of assisting a small entrepreneurial firm in its growth process. The purpose of the present study is to analyze the effect of a third party certification process according to ISO 9001 on the growth process of small entrepreneurial companies. The empirical analysis is based on the case of BIM Kemi AB, a fast growing entrepreneurial firm which in 1989 was the first small firm to receive an ISO 9001 certificate in Sweden. BIM Kemi AB is a producer of specialized chemicals for the paper and board industry. The firm was founded in 1974 and the number of employees trippled from 1984, to 75 in 1990. The study found that the ISO 9000 certification process can be used as a means for facilitating growth in small entrepreneurial companies. The main contribution is that it remedies some of the growing pains by forcing the company toward more structure by documenting and thus considering and developing work tasks and the relationship between them. The real efficiency of ISO 9001 as a tool for quality improvement and growth is totally dependent on the firm itself and its management. It is up to the company to decide upon where to put the cross bar, i.e. the company must use goals far beyond the mere spur of certification in order to make a major impact. In sum, there is still some validity in the words of Dr. Juran, who stated, that one should involve oneself in ISO 9000, but not let it interfere with quality work. However, we believe that ISO 9001 can be used as a driver for organizational change, provided that the management understands its role and limitations. In such case, the ISO 9001 can provide dynamic input both for company growth by providing structure, as well as contribute toward total quality. However, ISO 9001 can never be more than one contributing factor toward attaining a state of continous improvement and striving for total customer satisfaction.