The comparative study on the financial performance of certified and non certified company based on ISO 9000 certification / Imran Abd. Rashid

The ISO 9000 series of quality management systems standards, introduced in 1986, has been adopted at over 560,000 locations worldwide. Past evidence suggests that firms can achieve internal benefits such as quality or productivity improvements or that certification can help firms maintain or increase their market share, or both. Others argue that the standard is too generic to cause performance improvement and high in cost. Nevertheless, it also can be seen as a signal of good management. This study main objective is to compare the financial performance of manufacturing companies (consumer products and industrial products counters) publicly traded in Bursa Malaysia. Sample comprises 40 ISO 9000 certified companies, and 40 non certified companies. The performance evaluation was developed on five measurement predictors that include ROA (Return on asset), ROE (Return on equity), PRO (COGS/Sales), SALESG (Sales growth) and NPM (Net profit margin). The time frame of this study was from 2000 to 2006 on annually basis. In analyzed the data, this study used independent group t-test. It is an appropriate way in comparing two set of data that is heterogeneous. In comparing the performance of the group, each variable are compared using mean. After being tested and result shown a significant value, all of those five variables for certified companies are compared to uncertified companies using mean. The result showed that all of the certified companies' variables outperformed the non-certified company's variables. Lastly, this study has concluded that there are an association between ISO 9000 registration and performance of manufacturing companies in Malaysia.