The Economic Consequences of Iso 9000 Certification in East and West German Firms in the Mechanical Engineering Industry

Zusammenfassung

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A central argument of new institutionalism is that organizational success depends not only on efficient coordination and control of productive activities, but on conforming to institutionalized expectations. There is a dearth of empirical studies which analyze the effects of the adoption of institutionalized elements. In our study, we examine the effect of ISO 9000 certification on resource inflow of German mechanical engineering firms. Our findings suggest that organizations are actually rewarded for complying with institutionalized expectations and implementing ISO 9000 standards. Our findings also show that the readiness to comply with institutionalized norms led to different economic consequences in East and West Germany.

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Auszug

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The Economic Consequences of Iso 9000 Certification in East and West German Firms in the Mechanical Engineering Industry

Introduction

A central argument of new institutionalism in organization theory is that organizational success depends not only on the efficient coordination and control of productive activities, but also on organizations conforming to institutionalized expectations in order to gain legitimacy and the resources they need for survival (Meyer/Rowan 1977; DiMaggio/Powell 1983; Tolbert/Zucker 1996; Oliver 1997; Karhunen 2008). Despite the centrality of this proposition, there is a dearth of empirical studies which research the effects of the adoption of institutionalized elements on the inflow of resources. Most of the studies within the tradition of new institutionalism focus on the diffusion and adoption of institutionalized structural elements and management practices (Scott 2008). Only a few studies shed light on the effect of the adoption of institutionalized structural elements on organizational performance. Some studies analyze the survival chances of hospitals and other public service organizations after having obtained accreditation (Singh et al. 1986/1991; Zucker 1987; Ruef/Scott 1998). Others examine the effect of the adoption of institutionalized elements on share prices (Westphal/Zajac 1998), corporate reputation and financial performance (S taw/Epstein 2000). Most of the studies find that the adoption of institutionalized practices has a positive effect on organizational performance. However, with very few exceptions (Staw/Epstein 2000), the anticipated effects on the inflow of resources has not been directly tested. Staw and Epstein (2000) measured the effects on a company's economic performance, recording financial data on return on assets, return on equity, and return on sales.

However, it has not been inve...

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