fied Quality Management Systems (QMS) worldwide are a clear evidence of the .... embedding ISO 9001 and business management;. â¡ Organizational context ...
QUALITY MANAGEMENT IS O 9 00 1 Q u al i t y M a na g e me n t S y s t e ms t h ro u g h t h e Le n s o f Or g an i z at i on a l C ult ur e Luis Miguel FONSECA* Abstract
Both managers and scholars have convictions about the organizational approaches that best support organizational performance of the respective organizations and its Quality Management Systems. After a literature review of ISO 9001 Quality Management Systems (including the changes introduced by the 2015 edition), Organizational Culture theories are addressed and input from a CEO´s focus group was gathered. The importance of organizational culture for the success of Quality Management Systems and the achievement of the organizational desired results is highlighted. The article advances a proposal to analyze ISO 9001 International Standard through the lens of organizational culture theories identifying a stronger open systems approach (influence of the environment, dynamic perspective, need for survival) of the 2015 ISO 9001 edition when compared with the 2008 one. This provides additional knowledge both to scholars and practitioners for a better understanding of the culture issues that can maximize ISO 9001 Quality Management Systems 2015 edition contributions to organizational enduring success. Keywords: quality management systems, ISO 9001, organizational culture..
1. Introduction
The more than 1 Million organizations with ISO 9001 certified Quality Management Systems (QMS) worldwide are a clear evidence of the relevance of this International Standard. With the release of the 2015 version of ISO 9001 both the organizations already certified and those that are planning to implement) (and possible certifying) their QMS accordingly to ISO 9001, will have to take into consideration the new requirements and change, adapt or implement them. Although there is considerable research on the motivations, methodologies, benefits and difficulties in implementing ISO 9001 QMS, not all reported cases are successful. The importance of organizational culture for the success or failure of Quality Management Systems has been addressed by researchers. The paper starts with the literature review of ISO 9001 Quality Management Systems followed by organizational culture and organizational theories. Based on literature review and the inputs of a CEO´s focus group, a proposal is made to analyze ISO 9001 International Standard 2015 edition through the lens of organizational theories, identifying which theories can support specific quality management principles and requirements. With this exercise, several organizational theories were identified as supporting ISO 9001 International Standard edition 2015 changes. The article concludes that this knowledge can contribute to the understanding of the success factor for ISO 9001 QMS implementation although acknowledging that the proposal is a simplification of a complex issue and, therefore, is subject to criticism and future empirical research should be made.
2. Literature Review
2.1. Quality Management Systems
To respond to the increase on global competition, a considerable number of organizations have implemented ISO 9001 Quality Management Systems, aiming to respond to external stakeholder pressures or to internal motivations and achieve increased performance. ISO (ISO, 2015) published the first version of the ISO 9000 series of International Standards in 1987 in response to the gro-
wing internationalization of business and the need for common quality management system standards. ISO 9001:2008 is based on a PDCA (Plan-Do-Check-Act) approach and on the eight quality management principles that should lead the organization to improved performance (ISO 9000:2005 International Standard). There has been a consistent growth in the number of organizations that have implemented ISO 9001:2008 International Standards has shown by the chart presented in Figure 1 of the trend of organizations with ISO 9001 certified Management Systems worldwide (ISO, 2014).
Figure 1. ISO 9001 Certified Organizations Survey Trends
Karapetrovic, Casadesus and Heras (2008) identified 115 empirical studies that investigate the impact of ISO 9000 standards worldwide. Tari et al. (2012) also suggest that ISO 9001 has clear benefits on organizational, operational, people and customer results. Boiral (2012) summarized the results stating that the success in the implementation of ISO 9001 Quality Management Systems (QMS) is linked to the organization and to the
——————— * ISEP-IPP, School of Engineering Polytechnic of Porto and CIDEM, E-mail: lmf@is ep.ipp.pt.
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QUALITY MANAGEMENT way the standard is interpreted and implemented. When the main motivations to implement the standard are internal (organizational improvement) more benefits are achieved than when they are external (e.g., respond to customer requirements or expectations, achieving marketing differentiation). Also accordingly to Yin and Schmeidler (2009) standardized management systems may be implemented in very different ways depending on organizations, which might explain the heterogeneous performance of these standardized systems. Fonseca (2015a), on a study of Portuguese certified organizations that also implemented the EFQM Business Excellence Model (BEM), reported there is indeed a moderate positive correlation between ISO 9001 certification maturity and EFQM BEM results, the higher the number of years of ISO 9001 certification, the higher the results of the organization EFQM model evaluation and recognition. In summary, certification is indeed a measure of QMS implementation intensity and it brings but we need to take into consideration how variations in QMS implementation may affect performance results and certification to ISO 9001 should be a result of a well implemented Quality Management System, not just “certification”. The release of the 2015 version of ISO 9001 is under way and the new standard version should be closer and more in line with the Business Models (Fonseca, 2015b): Concepts like change control, strategic direction and knowledge management will be reinforced on the ISO 9001:2015 International Standard approaching and embedding ISO 9001 and business management; Organizational context and relevant interested parties (those that have some actual or potential impact on the quality of products and services) were introduced; There will be more emphasis on process approach and less on documentation and Risk-based thinking was introduced adding a systematic evaluation of potential and actual issues with the aim of making processes more robust and capable.
ISO 9001:2015 also will bring some change to the Quality Management Principles (QMP) as presented in Table 1. Table 1. Quality Management Principles
ISO 9000:2005/ISO 9001:2008
1. Customer Focus 2. Leadership
3. Involvement of People 4. Process Approach 5. System Approach to Management
Proposed ISO 9001:2015 1. Customer Focus 2. Leadership
3. Engagement of People 4. Process Approach
...............................
6. Continual Improvement
5. Improvement
8. Mutually Beneficial Supplier Relationships
7. Relationship Management
7. Factual Approach to Decision Making
6. Evidence-based Decision Making
The QMP will be reduced from 8 to 7; the one which was omitted is “Systems Approach”, with “systems” and “process” both considered under the new principle “Process Approach” which refers to “managing inter-related processes”. A system is the management of inter-related processes so, although “Systems Approach” is not a principle, the new principle is more powerful as it redefines Process Approach as the processes and their interrelationships. “Engagement of People” and “Relationship Management” will have a reinforced intensity while “Improvement” clearly states that there are several sorts of improvement with continuous improvement being one of them. “Evidence-based Decision Making” is more adjusted to the real management situations.
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2.2. Organizational Culture
According to Scott (2003), an organization is a group whose members coordinate their behaviors to achieve shared goals or produce a product, whether businesses, schools, families or voluntary associations. The qualities that distinguish these organizations between themselves are the roles, rules, purposes, recurring behaviors and clearly defined borders. Isolated individuals or random groups are not considered as organizations, although there are some groups and social movements that can be classified as ambiguous cases of organizations. Organizations are necessary to achieve most of society shared goals, are everywhere and have evolved in a remarkable way. But there are still a considerable number of open questions: How to set goals that sometimes are in competition or even antagonist? How to get the best people to perform the necessary tasks? How to coordinate the different people needed to achieve the various goals and the several tasks that contribute to achieving these goals? How to obtain the resources/inputs (human, material, and financial resources) to fulfill the organization’s mission and objectives? How to achieve the results/outputs intended (whether goods or services) and make them reach the end consumer? How to identify the needs and expectations of the various stakeholders that influence or are influenced by the organization and how to adapt this to the external context and the surrounding environment?
To help answer these and other questions, academics and managers have developed a set of theories which will be briefly outlined. Although there is a certain degree of ambiguity concerning the organizational culture construct (Verbeke, Volgering and Hessels, 1998) with several definitions of organizational culture and different dimensions to describe it, most scholars (Hofstede, 2001; Schein, 2004; Cameron and Quinn, 1999) suggest that organizational culture is a pattern of shared values and assumptions within an organization which enables this to operate: O’Reilly, Chatman and Caldwell (1991) identified seven dimensions to develop its organizational culture profile: innovation, stability, respect for people, focus on results, attention to detail, orientation to the team and aggressiveness; Other researchers (Handy, 1999) suggest that there are key factors that determine the choice of culture and structure: history, technology, ownership, size, objectives, environment and people; Hofstede’s theoretical model has received considerable attention within Organizational Theory field (Hofstede, 2001; Hofstede and Minkov, 2010). It consists of six dimensions with quantitative indices that can be used to describe different national cultures: power distance (the way a society way manages inequalities between individuals); individualism (“I”) versus collectivism (“We”); masculinity versus femininity (focus on success and material reward versus a preference for cooperation quality of life and caring for the vulnerable); uncertainty avoidance (how a society deals with uncertainty and ambiguity); pragmatic orientation (people accept the adversities of life and adapt accordingly) versus normative orientation (follow social conventions and tradition, need to know the absolute truth); and indulgence (fun and joy are basic human needs) versus restraint (need social norms to regulate “acceptable” fun and joy). A possible synthesis approach is presented in Table 2, after the works of Mcfarland and Gomes (2013), Scott (2003) and Leavitt (1965).
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petitive edge to more agile and innovative competitors (Brown, 1995); According to the theory based on the concept of contingent thinking (Wilkins and Ouchi, 1993), certain types of organizational cultures are more suited to specific situations.
Table 2. Organizational dimensions Organizational elements
Actors/participants Social structure Objectives Technologies/Tasks Environment
Description
Participants that contribute and benefit from the organization There are persistent social relations among the organization’s members Goals that participants aim to ensure the performance of tasks and activities Means by which organizations carry out their work or transform inputs into outputs The physical, technological, cultural and social context in which organizations are inserted
Following literature review from Mcfarland and Gomes, (2013), Scott (2003), Allison (1969) and Leavitt (1965), a considerable stream of Organizational Theories has been identified, as briefly presented in Table 3. Both scholars and practitioners have focused on the million dollar question: “What is the Best Organizational Culture to maximize performance”? Based on the empirical studies considered for this research, the four following approaches can be outlined:
Perhaps the most solid and frequent argument is the thesis of the strong organizational culture. Some experts in Organizational Management (Denison, 1984) believe that in order for organizational culture to be able to affect organizational performance, it must be strong. A strong organizational culture contributes to shared goals and increases the commitment to the organization and aligns individual and organizational goals, which positively contributes to increased productivity and organizational performance (Brown, 1995); However, there are researchers that suggest an inverse relationship between organizational culture and performance. According to these authors, it is a high performance that leads to a strong and homogeneous organizational culture and not the other way; There are also researchers that consider that the two previous approaches can be problematic in volatile environments and that such organizations may not be able to change as quickly as would be required, losing com-
Although it is difficult to empirically test these various theories (Brown, 1995; Calori and Sarnin, 1991; Siehl and Martin, 1990) this does not necessarily means that these relations are not present. There is a general agreement that what we call organizational culture has a significant impact on many actions and subsequent outcomes of organizations, including the respective operating and financial performance (Kotter and Hesett, 2004). Moreover, evidence more recent research supports that there is indeed an association between certain features of organizational culture and organizational performance outcomes (e.g., Hartnell, Ou and Kinicki, 2011; Sackmann, 2011). With the purpose of collecting the “C suite” view on these relevant issues, a focus group of six CEO´s of Portuguese companies with annual sales greater than 1 Million Euros and more than 25% export ratio was set up. The participative discussion yielded several common perspectives: Each organization has its own organizational culture that evolves over time; Within a culture there may be different subcultures or cultural differences between the subgroups of the organization; It is easier to change observable actions and behavior than beliefs and assumptions and the change in a cultural element can affect another and vice versa; We can apply and combine multiple theories in an organization.
Taking into consideration the literature review and the feedback from the CEO´s Focus Group, the following summary is proposed in Table 4.
3. Quality Management Systems and Organizational Culture
The study of the reasons for success or failure of Quality Management Systems has highlighted the importance of organizational culture for the achievement of the expected results (Prajogo
Table 3. Main Organizational Theories Organizational Theory
Rational model (satisfactory rationality as a variant) or rule-based Decision by the ruling coalition Organizational Anarchy Learning and organizational intelligence Organizational Culture
Summary
Applicable to
Multiple actors with inconsistent preferences and none alone can decide. Direct management of relations through negotiation
Politics
Decisions based on the results, follow the rules and procedures Finance (theories based on the (however, what are the rules to follow?) consequences), Politics and bureaucracy
Anarchic process (with no agenda and predefined rules ) during and between meetings; its effectiveness depends on the flow issue, actors and present solutions, also known as “Garbage Can Theory” (Coehn et al., 1972) Ability to learn and adapt
Focused on the structure and on the ingrained culture of the organization
Open systems, extensible environment and how it influences Management of Resources dependency behavior and survival of the organization. Focused on the dependency relationships of resources between organizations
Industry Knowledge (e.g., Universities, industry and high-tech services) Industry industry Industry industry
Knowledge (e.g., Universities, and services) Knowledge (e.g., Universities, and services)
Finance, Politics, Industry and Services
Network Organizations
Patterns and relationship agreements
Politics
Organizational Ecology
Environmental determinism and natural selection due to competition between organizations
Finance, Industry and Services
Institutional Theory and Organizational Adoption of models of successful organizations Legitimacy
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Industry Knowledge (e.g., Universities, Industry and Services)
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QUALITY MANAGEMENT Table 4. Considerations concerning Organizational Theories Dimension
Influence on Organizational Theories
Focus
Some theories are more focused on the structures and culture (Institutional, Organizational Culture) than others (Resource Dependency, Ecological Population, Rational Actor)
Some theories are more theoretical than other (perhaps more suited for the planning stage), while others are more Theoretical versus Practical limited in extent and therefore more suitable for specific situations There are theories that assume an internal capacity to change and adapt (e.g., Organizational Theory, Institutional Capacity to Change Theory, Learning Theory or Resource Dependent Theory), while others are more deterministic (Ecological Population)
Activity Sector
Financial Sector: theories based on the consequences, such as rational actor, dependence on resources, ecological population; Knowledge Industry: organizational anarchy, organizational learning, organizational culture, Institutional; Politics: bureaucratic, coalition theory, networks; Bureaucracy: organizational processes and compliance with the rules
and McDermott, 2005). In order for the organizations achieving enduring improvements, changes to the way they carry their business have to happen (Reger et al., 1994; Rajamanoharan and Collier, 2006;). The existence of an organizational culture favorable to the implementation for those changes and of the corresponding attitudes and behaviors of the employees are of great importance for success (Van de Wieleetal, 1993; Lewis, 1996; Buch and Rivers, 2001; Sousa-Poza et al., 2001; Lagrosen, 2003; Prajogo and McDermott, 2005; Skerlavaj et al., 2007). As an example, several studies (Zu et al. 2010) have used the CVF model developed by Quinn at al. (Quinn, 1988; Quinn and Rohrbaugh, 1981, 1983) to access organizational culture. The
CVF model has two axes (Internal Focus & Integration versus External Focus and Competitiveness; Control and Stability versus Flexibility and Spontaneity) resulting into four types of Organizational Culture: Hierarchical, Group, Rational and Development cultures. However, most researchers only consider a limited range of Organizational Theories and do not focus on ISO 9001 International Standard Management Systems. Considering the relevance of ISO 9001 and the edition of ISO 9001:2015 version, it is appropriate to evaluate how the new 2015 ISO 9001 edition relates to relevant Organizational Theories. Table 5 below attempts to analyze ISO 9001:2015 edition with the lens of Organizational Culture Theories.
Table 5. ISO 9001:2015 QMS through the lens of Organizational Culture Theories ISO 9001:2015
Organizational Theories relationship
The Quality Management Principles and the requirements of the future standard ISO 9001: 2015 reflect changes in increasingly complex, demanding and dynamic environment in which organizations operate and aim to facilitate the effective implementation by organizations and an assessment of effective compliance (1st, 2nd or 3rd party, as applicable).
A major objective of ISO 9001:2015 is to increase customer confidence in quality management systems based on ISO 9001. There is a greater emphasis on process approach and less on documentation. The introduction of “Risk-based thinking concept”. Strategic Direction requirement was added to the review by Management to try to integrate Quality Management Systems into business. The requirement for an active knowledge management was added. The economic crisis has led to situations where senior employee’s retirement could lead to a knowledge management crisis. Quality management principle Factual Approach to Decision Making” was changed to “Evidence-based Decision Making “.
Quality management principle “Continual Improvement” was changed to “Improvement”. Quality management principle “Mutually Beneficial Supplier Relationships” was changed to “Relationship Management”. The more organizations apply ISO 9001 requirements “because it makes sense for their business” rather than “because ISO 9001 requires” the stronger the ISO 9001.
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ISO 9001:2015 adds to a natural systems view where organizations follow processes and rules within an organizational culture, a more open systems perspectives.
The organizations now extend their focus to the environment that has a major influence on behavior and survival.
With resource dependence theory the dependency between firms is highlighted; Networking focus on the larger arrangements and patterns of coordinated actions between several organizations; NeoInstitutionalism emphasizes adapting the most successful structures and cultures; Population ecology stresses the importance of natural selection due to inter-firm competition. Consequence based theories of rational actor and bounded rationality. The organizations also extend their focus to the environment that has a major influence on behavior and survival (resource dependence theory, networking, neo-institutionalism and population ecology can apply). Organizational Management experts believe a strong organizational culture increases the commitment to the organization and aligns individual and organizational goals, which positively contributes to increased productivity and organizational performance. All models are potentially applicable.
Capacity to change and adapt (organizational learning) and knowledge as key strategic resources (resource dependence theory). Bounded rationality, sometimes we should recognize imperfect information, ambiguity, and select at satisfactory option (good enough). Organizational learning focuses on action to produce results from inspection of practice and assessment of its returns to the organization, all through local collaboration and external network searches. Emphasis on network forms of organization. In rapidly changing environments, organizations must be able to respond flexibly and dynamically, making collaboration relevant for success (Lawrence and Lorsch, 1967). Need to identify complementary strengths, form alliances, create open-ended mutual benefits where possible and outsource secondary tasks (to focus on core). Consequence based theories of rational actor, resource dependence and population ecology.
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4. Conclusions
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This paper attempted to address Quality Management System through the lens of Organizational Theories, focusing on ISO 9001 International Standard and the changes introduced on the 2015 version. Following a literature review of Quality Management Systems and Organizational Theories, a proposal to support Quality Management System within the several Organizational Theories is made. No attempt has been made by the author to suggest whether an organizational model is better than the other. It might be advisable to look within the scope of all the organizational models presented to understand the underlying culture issues that can maximize (or jeopardize) Quality Management Systems implementation strategies, difficulties and benefits. Depending on the organization strategy and value proposition, sector of activity, life cycle phase, resources and external environment, different theories should apply. However, as general statement, the 2015 edition of ISO 9001 adds a stronger open systems perspective (influence of the environment, dynamic environment, need for survival) to the 2008 edition more natural systems views (follow rules and processes). As stated by Zbaracki (1988) the difference between the dominant culture and the culture required by Quality Management
is a key consideration in whether a Quality Management initiative will be successful or not. The main aim of this article is to shed some light into the connections between the Quality Management and Organizational Theory fields of knowledge. More than 1 Million organizations with ISO 9001:2008 certified Quality Management Systems will have to adapt and make the transition to the 2015 version within the 3 years after the 2015 version release date. So it is of upmost importance to try to maximize the potential benefits of ISO 9001:2015 and to minimize the difficulties of the transition process (for the organizations already certified) or of the implementation process (for those that have still to start or to finish this process). By analyzing the changes to ISO 9001 International Standard 2015 edition, several supporting organizational theories were identified. Practitioners should be aware of these theories and when and how to apply them for maximizing the Quality Management Systems benefits to the relevant Stakeholders. It should be acknowledged that this paper is a simplification of a very complex issue and the analysis proposed by the author is open to criticism. Research should be carried out to access the validity of these proposals and to compare, in the future, organizational cultures of companies that have been successful at implementing ISO 9001:2015 with those that have been unQ-as successful.
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