ISO 9000 Implementation Impacts Towards Financial Performance, Evidences From Manufacturing Enterprises Of Indonesian Stock Exchange

Lianto, Lianto and Basana, Sautma Ronni and Tarigan, Zeplin Jiwa Husada (2009) ISO 9000 Implementation Impacts Towards Financial Performance, Evidences From Manufacturing Enterprises Of Indonesian Stock Exchange. In: ICBMR, 22-24 Nopember 2009, Bali.

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Abstract

To achieve global competitiveness, firms need to create and develop strategies to deal with changing organizational operations and external environments. This includes situations such as creating business networks, improving productivity and quality, and promoting entrepreneurship orientation. Adopting an international standard is a concrete strategy for increasing competitiveness. ISO 9000 is the most commonly adopted form of such a standard and it refers to a series of five international standards that provide guidance in the development and implementation of an effective quality management system. ISO 9000 is a periodic continuous improvement in operational and administration on business industry and have impact on financial performance. This paper presents objective evidence on whether this criticism is indeed justified. First, we discuss the ongoing debate on ISO 9000 ability to significantly improve financial performance, the reasons for this debate, and the importance of resolving this debate one way or the other. Second, we present evidences on the financial results that publicly traded organizations have achieved from implementing ISO effectively. Financial results are measured using variables such as return on COGS (cost of good sold), total inventory, net income, gross income, operating income, and pretax income. Third, we discuss how the financial results vary by organizational characteristics such COGS (cost of good sold), total inventory, net income, gross income, operating income, and pretax income of the ISO before implementation, and post implementation by method one sample t-test. The result of an adoption ISO 9000 is better than before implementation in financial index. Keywords: adoption ISO 9000, financial index, before and post implementation ISO

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