The Impact of ISO 9001 : quality management system (QMS) on financial and operational performance of service Sector organizations in Sri Lanka

Abstract

The increasing global competition and improved customer awareness demands for higher quality ofgoods and services and it has fostered the adoption and implementation of Quality Management Systems (QMSs) in organizations. ISO 9001, being the most popular QMS in the world, ensures the quality of systems in which goods and services are produced. Further, it helps companies to achieve advantages and improve the performance. Though the application of ISO 9001 standard in manufacturing sector is at a higher level, it could be noticed that the application of the standard in service sector in Sri Lanka is at a very low level. Further, literature does not provide a clear picture on the benefits which can be gained by implementing ISO 9001 in service sector organization in Sri Lanka. Hence, an attempt was made in this research to address the above research gap by studying the impact of ISO 9001 certification on financial and operational performance of service sector organizations in Sri Lanka. This paper reports on findings of an expert survey and case studies of three private sector service organizations which have obtained ISO 9001 certification. In expert survey, semi structured questionnaire was used in data collection and data were analyzed using Relative Important Index (RII). The required data in case studies were collected through semi structured interviews and content analysis. Cross case analysis was adopted for data analysis. The findings of empirical study confirmed the expert survey findings that the implementation of ISO 9001: QMS has a significant impact on both financial operational performances on service organizations in Sri Lanka.