The financial impact of ISO 9000 certification to Lithuanian companies

Abstract

At the beginning of 2006 more than 600 firms in Lithuania announce that their quality management systems are certified to one of the ISO 9000 standards. Many companies invest considerable resources in order to obtain certification of the quality standard ISO 9000. The main question is: why do firms need this? Some argue that implementing a quality management system leads to improved internal processes, which in turn enable higher productivity and lower costs. Others argue that customers increasingly require ISO 9000, so certification should help maintain or increase a firm's market share. Furthermore, others state that the standard is too generic to cause performance improvement but can be seen as a signal of good management. This paper contains an evaluation of results from a survey on ISO 9000 certified companies in Lithuania. Moreover we aim to track financial performance of all ISO 9000 certified publicly traded companies in Lithuania and test weather ISO 9000 certification leads to productivity improvements, market benefits, and improved financial performance.