International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 INTERNATIONAL JOURNAL OF MANAGEMENT (IJM) 6510(Online), Volume

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THE EFFECT OF IMPLEMENTATION OF ISO 9001:2008 QMS ON THE ORGANIZATIONAL PERFORMANCE IN AN R&D ESTABLISHMENT
Neeti Jain*, Jimmy Kansal*#, AshwagoshaGanju*, Anil Khurana**, PramodSatyawali* * Snow & Avalanche Study Establishment, Sector - 37 A, Chandigarh, India. ** Estate Management Unit (R&D), Sector 29 A, Chandigarh, India. jimmy.kansal@sase.drdo.in

ABSTRACT One recurrent theme within the research into implementation of quality management systems is the study of its effect on the organizationalperformance. However, most research is focused on analyzing the effects of the implementation of different QM systems in either a manufacturing industry or in production lines. This paper presents an empirical study, which examines the effectiveness of ISO 9001:2008 QM system practices in an R&D establishment. This study used data of an R&D establishment certified with ISO 9001:2008 by Standardization, Testing & Quality Certification (STQC), Government of India. Two research questions were posed, with the rst pertaining to the effect of implementation of ISO 9001:2008 on the User satisfaction and the second focusing on the effect of QMS on the key performance indicators viz. Project performance, Instrument management systems, Human Resources Development, User communication and Management performance. The ndings showed signicant contribution of ISO 9001:2008 QMS in enhancing the effectiveness of an R&D organization. These results further suggest that ISO 9001:2008 as a set of generic quality managementprinciples can be adapted in environments other than manufacturing or production areas. Keywords: ISO 9000, ISO 9001:2008, R&D, Quality Management Systems (QMS), User Satisfaction Index (USI), Key Performance Indicator (KPI) 1.0 INTRODUCTION

The theory of Quality Management is the most popular and durable modern management philosophies, which has a profound and unparalleled impact on modern business industry (1).This theory lays emphasis on the documentation of various procedures and
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013)

adopts a process based approach. The standards and the framework of required documents vary according to the objectives of the organization. The topmanagement, leadership and people involvementare also important factors in successful QMS implementation in any sector, as it is directly related to quality planning, human resource management, learning and customer focus. Managers can integrate quality related issues and plan accordingly, that helps in defining the goals with improved quality (2). QMS in research and development begins with strict attention to precise documentation, uses of appropriate methodology and scientific correctness. In R&D organization QMS promotes collaborative accomplishments, reward both team as well as individual performance, and initiates and maintains an environment conducive to achievement of set targets, whereas in industries it starts with the aim of profitability. ISO provide a normative framework and methodology to define a QMS in a consistent way, paying special attention to user feedback, which is a function of user satisfaction, timeliness and delivery. The aim of ISO is to promote the philosophy of standardization and related activities in the world with a view to facilitate the exchange of goods, services, intellectual, scientific, technological and economic activities globally. Two most important objectives of the ISO 9001 series of standards are to develop a simplified set of standards that are equally applicable to small as well as medium and large organizations and the details of documentation required to be more relevant to the desired results of the organizations process activities.The ISO 9000 standard allows a registrar company to conduct outside audits of a companys quality management system (QMS), which certifies the implementation and compliance of the QMS to the ISO standard (3). ISO 9001: 2008 requires organizations to continually improve their business processes which also force the firm to look at its institutional context and resource allocation decisions. This enables each individual organization to develop the minimum amount of documentation needed in order to demonstrate the effective planning, operation and control of its processes. ISO 9001: 2008 is a process based, more generic and clearly based on Plan, Do, Check and Act principle. An ISO 9001: 2008 guideline specifies the standardized requirement for a quality management system implementation in order to enhance user satisfaction and continual improvement, which can be achieved by identifying and periodically measuring the KPI of institutionalactivities.KPI are the indicators/ attributes of any task on which particular activity can be assessed and ranked for their output. These KPIs are required to be documented, measured and analysed to investigate the relationship between QMS and its effect on the performance. 2.0 METHODOLOGY

A case study of an R&D establishment has been carried out to assess the effect of implementation of ISO 9001:2008 QMS on the organizational performance. The establishment is working in the development of technologies for the mitigation of avalanche hazards and providing area specific operational avalanche forecast to the services, civilian population and disaster management agencies in Himalayas. At present the establishment is certified as per ISO 9001: 2008 for its QMS. The methodology adopted is to collect the data pertaining to various attributes of QMS and carry out their analysis for organizational performance.For assessing the effect of QMS implementation,
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013)

various KPIs have been identified, selected and analyzed for their performance after a year of implementing QMS. The data is collected by a closed questionnaire administered in person as well as a set of open questions to clarify any kind of doubts.The questionnaire is based on the past experience and literature survey. The process of developing questionnaire included a number of brainstorming sessions to modify and eliminate a number of variables. A pilot survey is then conducted to update version one to make the questionnaire further free from any kind of errors as a step towards continual improvement. The questionnaire is answered by the Divisional and Group heads responsible for the implementation of quality practices in the respective departments. Secondly for evaluatinguser satisfaction through USI and continual performance, data was collected from various users of the establishment on a five point Likert scale. After analyzing the KPI for various tasks, we have verified the extent of user satisfaction by taking the feedback from the user and compared it with KPI markings. The effect of user satisfaction on the continual performance of the establishmentwas also analyzed. 2.1 Model I

Clause 5.1of ISO 9001: 2008 standard defines thattop management shall provide evidence of its commitment to the development and implementation of the quality management system and continually improving its effectiveness. This is achieved by establishing and reviewing quality policy, quality objectives for continuing suitability, conducting management review and ensuring resource availability. In this study management responsibilityis assessed after identifying KPI of management performance viz. timeliness, resource allocation etc. Clause 7.6 of the standard emphasizes on the control of monitoring and measuring equipmentbycalibration against international or national measurement standards. Calibration of instruments has been kept as a key performance indicator in the instrument management system. ISO standard for QMS lays lot of emphasis on user satisfaction vide Clause 8.2.1 of ISO 9001:2008. This attribute is shortlisted as one of the measurements of the effect of QMS on organizational performance and analyzed under user communication system. Clause 6.2.2states that the organization shall determine the necessary competence for personnel performing work affecting conformity to product requirements (ISO 9001: 2008). The employees should be competent on the basis of appropriate education, skill and experience considered mandatory for the continuous growth of organisation. This aspect of competence, training and awareness is captured and analyzed under the HR practices. The validity of QMS implementation was measured using a second order measurement model where QMS was treated as a second order KPI, which was measured by five first order latent KPIs responsible for assessing effect of QMS on overall performance. The set of five KPIs alongwith their attributes under this study areproject performance, instrument management system, HR practices, user communication system and management practices as mentioned in Table 1.In this paper we have analysed the effect of implementation of QMS on all above identified performance based KPIs.

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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013)
Table 1: Various KPI and their considered attributes S. No 1 2 3 4 5 2.2 KPI Project performance Instrument management system HR Practice User Communication system Management Practice Attributes Preparedness, Planning time, Over run time, Failure, Performance Preventive maintenance cost (PMC), Breakdown cost , Outage time, Mean performance efficiency (MPE) Timeliness, Procedural correctness, Training Effectiveness Involvement, Clarity in requirement, Satisfaction Timeliness, Problem solving, Budget planning, Resource management

Model II In user feedback form, grade points were sought from various users of the establishment. The grade points were finalized based on various parameters namelyvision, mission, strategies, values and roadmap of the establishment. A set ofperformance parameters were considered includingtimeliness in services, consistency in results, promptness in query resolution and accuracy in results. User feedback form was chosen for collection and analysis of data. The grades are shown as mean SEM of all the 20 feedback forms. Evaluation of USI has been further done using AGPi=1,n/ n. RESULTS

3.0

ISO 9001: 2008 clause 4.2 gives detail requirements about management responsibility. In this study we have analysed the effect of implementing ISO 9001:2008 QMS on management performance (figure 1) in the establishment. Results indicate an improvement in the management activities primarily focusing on timelinessthat has enhanced by about 20 % when compared to the indices before implementing QMS. Problem solving capacity is also enhanced significantly. The budget planning time required is reduced due to proper documentation of the procedures and activities. Resources are used optimally as all the activities are well defined and management is aware about the present competencies and required competencies for the organization as the responsibilities and skill sets are available.

Figure 1: Effect of ISO 9001: 2008 QMS implementation on Organisational performance attributes

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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013)
Figure 2 reflects the effect of QMS implementation on various attributes of project management. Results revealed that after implementing QMS, the establishment is geared up to take new projects. TheProject Directors and Project Leaders are spending more time in the conceptualization and planning phase of the projects. Overrun time has reduced due to increased preparedness and documentation, thus failure chances of projects has reduced. Overallperformance of project is increased significantly.
100
B efo re IS O 9 0 0 1: 2 0 0 8 A fter IS O 9 0 0 1: 2 0 0 8

80

Percent (%)

60

40

20

P re p a re d n e s s

P la n n in g tm O R T

F aliu re R a te

P e rfo rm a n c e

Figure 2: Effect of ISO 9001: 2008 QMS implementations on attributes of Project management. Figure 3 indicates the benefits of QMS implementation on instrument management system of the R&D establishment. The instrumentation is a major area of concern as the thrust areas of the organization include development of technologies for the assessment and mitigation of cryospheric hazards. Results indicate that after implementing QMS, there is a significant increase in preventive maintenance, leading to a substantial reduction in breakdown cost of instruments and also reduction in outage time of individual instrument. The instruments are forced to be calibrated, thereby enhancing the effectiveness of the results.

Figure 3: Effect of ISO 9001: 2008 QMS implementation on Instrument Management System (IMS) attributes.

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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013)
Figure 4 shows effect of ISO certification on working of HR group, results revealed that QMShas led to significant rise in timeliness of job, team work and communication. The procedures are streamlined and documented. The clarity of goals is observed due to clear responsibility of each individual. Various attributes of HR are also integrated. This has led to a transparent environment and overall increase in the efficiency of the establishment.

Figure 4: Effect of ISO 9001: 2008 QMS implementations on Human Resource Group (HRG) attributes Figure 5 shows how implementation of QMS affected User attributes. After implementing QMS we have observed significant increase in user involvement vis-a-vis clarity in requirement. Significant rise is also observed in user satisfactionthat has beenanalysed through user feedback forms.

Figure 5: Effect of ISO 9001: 2008 QMS implementations on User Satisfaction Index (USI) and its attributes.

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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013) Table 2 indicates the grade points awarded by user for various services provided to them by the establishment. The grade points awarded by the users for various services after implementation of ISO 9001:2008 vis--vis before the implementation of QMS were analysed to evaluate USI. Results indicate the enhancement in the grades awarded by users for various services. S.No Services Grades awarded by user (Before ISO) 2.13 0.19 3.01 0.15 2.76 0.21 2.29 0.27 3.05 0.25 2.11 0.31 2.13 0.17 2.07 0.025 Grades awarded by user (After ISO) 4.31 0.34 4.76 0.12 3.32 0.17 3.41 0.31 4.71 0.15 3.61 0.26 3.47 0.21 4.65 0.034 remarks

1 2 3 4 5 6 7 8

Timeliness in services Promptness in query resolution Consistency in results Accuracy in results Organisational performance Design competency Technical expertise User Satisfaction Index

Excellent Excellent Very good Very good Excellent Very good Very good Excellent

( 1-2: poor; 2-3: good; 3-4: very good; 4-5: excellent) Table 2: Grade points awarded by users for various services provided by organization and user satisfaction index (USI) 4.0 DISCUSSIONS

Several studies have developed an instrument for measuring quality management, assessing its reliability and validity applicable to industrial as well as service sector and R&D (4,5,6). QMS also makes R&D more receptive to the concept of control and measurement. It directs R&D divisions to focus on user needs and expectations (1, 7). Various studies have been reported regarding QMS and performance by using different dimensions of performance on basis of several criteria viz. customer results, people results, society results and quality performance, some are found dependent and few have not found such link between QMS and performance (8, 9,10,11). Nevertheless, the positive arguments listed earlier on the applicability of QMS in R&D environments have also been supported by a number of studies (8; 12). Szakonyiusing six case studies showed that R&D function should adapt quality principles in order to achieve not only their own objectives but ultimate business successes, QMS also reported to enhance project performance in defence R&D (12, 13). The studies have also suggested that R&D practitioners are less prone to adopt quality systems merely because of the organisational legitimation it brings (14). However later studies have showed the link between quality management practices and improved performance using both factual data and perceptual data (15). The conceptual development of QMS has been reflected in its application, which has permeated beyond manufacturing or production lines into wider functions in organisations(1).The literature also reflects that QMS tools have a statistically significant effect on continuous improvement (16).

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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013) This study has produced two interesting findings in terms of integration of KPIs and USI on QMS and further its effect on organizational performance. The effect of QMS is in line with findings reported in other studies primarily in production, manufacturing and other R&D sectors (3, 16, 17). From the theoretical point of view, the integration of all the processes in an establishment supports the proposition of QMS in synergizing the efforts in enhancing the effectiveness and efficiency. Results revealed that organisation is excellent in terms of timeliness in services and promptness in query resolution, very good in consistency and accuracy in results. Evaluation of USI has been done using AGPi=1,20/ 20. The average grade point value corresponding to different services has yielded USI as 3.7175, which means the organizational performance is close to excellent. This further implies that though the overall view of the users about the establishment is encouraging, there is a definite scope for continual improvement from Excellent to Outstanding. 5.0 CONCLUSION

The case study of an R&D establishment has been discussed in the context of effect of implementation of ISO 9001:2008 on the organizational performance. The opportunity to become wiser and the scope to excel in new areas is drawing attention. Quality Management Systems has really served as a value addition. The establishment is more focused towards its users and the USI has become an index in its annual reports. The identified KPIs have served as a base in reflecting the tangible outputs after implementation of ISO 9001:2008. Overall the findings have been quite encouraging and motivating. 6.0 REFERENCES 1. Prajogo, D.I., Hong, S.W. (2008), The effect of TQM on performance in R&D environments: A perspective from South Korean firm. Technovation, 28, 855-863. 2. Marta, S., Lertiz, L.E, Mumford, M.D. (2005), Leadership skills and the group performance: Situational demands, behavioural requirement and planning. The Leadership Quarterly, 16(1), 97-120. 3. Anderson, S.W., Daly, J.D., Johnson, M.F. (1999), Why firms seek ISO 9000 certification: Regulatory compliance or competitive advantage. Production & Operations Management, 8, 28-43. 4. Flynn, B.B., Schroeder, R.G., Sakakibara, S. (1994), A framework for quality management research and an associated measurement instrument. Journal of Operations Management, 11 (4), 339- 366. 5. Ahire. S.L., Dreyfus. P. (2000), The impact of deign management and process management on quality: an empirical investigation. Journal of Operations Management, 18 (5), 549-575. 6. Rao, S. S., Solis, L.E., Raghunathan, T.S. (1999), A framework for international quality management research: Development and validation of a measurement instrument. Total Quality Management, 10 (7), 1047-1075. 7. Jayawarna, D., Holt, R. (2009), Knowledge and quality management: An R&D perspective. Technovation, 29, 775-785. 8. Powell, T.C. (1995), Total quality management as competitive advantage: a review and emperical study. Strategic Management Journal, 16 (1), 15-37.

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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online), Volume 4, Issue 1, January- February (2013) 9. Spector, B., Beer, M. (1994), Beyond TQM Programmes. Journal of Organisational Change Management, 7 (2), 63-70. 10. Easton, G.S., Jarell, S.L. (1998), The effect of total quality management on corporate performance: An empirical investigation. Journal of Business, 71(2), 253-307. 11. Taylor, W.A., Wright, G.H.(2003), A longitudinal study of TQM implementation: factors influencing success and failure. Omega, 31 (2), 97-111. 12. Pillai, A.S., Joshi, A., Rao, K.S. (2002), Performance measurement of R&D projects in a multi project, concurrent engineering environment. Int. J Project Management, 20, 165-177. 13. Szakonyi, R. (1992), Integrating R&D with company efforts to improve quality. International Journal of Technology Management, 7 (4, 5), 254-277. 14. Xu, Q. (2000), On the way to knowledge: making a discourse at quality. Organisation, 7 (3), 427-483. 15. Prajogo, D. I., Sohal, A. S. (2006), The integration of TQM and technology/ R&D management in determining quality and innovation management. Omega, 34, 296312. 16. Tari, J.J., Molina, J.F., Casterjon, J.L. (2007), The relationship between quality management practices and their effects on quality outcomes. European Journal of Operational Research, 183, 483-501. 17. Li, S.T, Chang WC. (2009), Exploiting and transferring presentational knowledge assets in R&D organisations. Expert System with Application, 36, 766-777. 18. Mrs. Varsha H. Patil and Mrs. Snehal M. Kamalapur, A Conceptual Thinking Of Total Quality Management In Engineering Education International Journal of Management (IJM), Volume 3, Issue 1, 2012, pp. 169 - 174, Published by IAEME

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