ISO 9000 implementation: a study of manufacturing companies in Saudi Arabia

Hesham Magd University of Stirling, Department of Management and Organisation, Stirling, UK Nasser Kadasah University of Stirling, Department of Management and Organisation, Stirling, UK Adrienne Curry University of Stirling, Department of Management and Organisation, Stirling, UK

Keywords
ISO 9000, Saudi Arabia, Organizational policy, Manufacturing industry

Introduction
To compete in todays turbulent competitive business environment and global economy, organisations are focusing on the satisfaction of customers needs as a means of obtaining advantage, and even survival. A major strategic change is that many organisations are striving to achieve customer satisfaction through an emphasis on quality products and services. This emphasis on quality is not surprising, because achieving, enhancing and sustaining competitiveness is dependent on providing superior quality products and services to consumers (Lai et al., 2002; Reed et al., 1999; Carr et al., 1997). Quality has emerged as a strategic competitive tool for organisational success (Yong and Wilkinson, 2002; Hansen, 2001). Organisations cannot afford to ignore the strategic implications of quality for their competitive position. As a result, they have pursued a number of quality philosophies and initiatives, such as total quality management (TQM), just-in-time (JIT), The Shing Prize, The Deming Prize and ISO 9000. The literature suggests that the most popular quality philosophies are based on ISO 9000 and TQM, although interest in TQM appears to be static, while ISO 9000 certifications have grown rapidly in recent years, from 343 to 643 certificates in 150 countries at the start of 2000 (Heras et al., 2002). ISO 9000 has been used more and more throughout Europe, the USA, and worldwide. It has become a subject of focus even in many developing countries, including Saudi Arabia (the focus of this study). This is because ISO 9000 is focused on quality control systems in general, ``from the process of product design to process design and from production process through to service after-sale (Motwani et
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Abstract
This study identifies the costs, benefits and the satisfaction level with ISO 9000 implementation in Saudi Arabian firms. A survey of 140 ISO 9000 certified manufacturing companies was carried out. The results suggest that these manufacturing companies were satisfied with ISO 9000 as far as the benefits gained from certification and its costs were concerned. They considered the benefits of ISO 9000 certification to exceed the costs of attaining the standards, and believed that ISO 9000 contributed to organisational survival and success.

al., 1996, p. 77). As a result, considerable progress has been made toward managing and controlling quality through the implementation of ISO 9000 (Wayhan et al., 2002). ISO 9000 standards were found to be the most prevalent quality approaches used (Withers and Ebrahimpour, 2001; Lee and Palmer, 1999). The literature review offers many diverse opinions on ISO 9000 in different countries, but little empirical research has been carried out in the Arab world, and Saudi Arabia specifically. Therefore, the purpose of this study was to assess empirically ISO 9000 implementation in manufacturing companies in Saudi Arabia. The specific objectives of the study were to examine: the benefits of ISO 9000 certification in Saudi Arabia manufacturing companies; whether or not the associated costs outweighed the benefits of ISO 9000 certification; the manufacturing companies satisfaction levels with ISO 9000. Saudi Arabia is one of the top non-OECD (Organisation for Economic Co-operation and Development) economies and is the worlds leading oil exporter. Saudi Arabian companies are faced with competition in domestic and international markets. Saudi Arabias open door free-market policy has led giant multinational players from around the world to this market to satisfy the demand of Saudi consumers with disposable income to spend. Thus the market in Saudi Arabia has become very competitive and complex. Companies find they are in competition with the high quality output from countries like America, and Japan. These competitive forces have encouraged Saudi companies to implement ISO 9000.
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Managerial Auditing Journal 18/4 [2003] 313-322 # MCB UP Limited [ISSN 0268-6902] [DOI 10.1108/02686900310488258 ]

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Literature review
ISO 9000
The ISO 9000 standards were introduced in 1987 by the International Organisation for Standardisation, based in Geneva, Switzerland (Abraham et al., 2000). It is acknowledged that ISO 9000 is largely based on the British Standard BS 5750 (Gourlay, 1994). The ISO 9000 standards are based on the concept that certain minimum characteristics of a quality management system could be usefully standardised, giving mutual benefit to suppliers and customers, and focus on process rather than product quality (Withers and Ebrahimpour, 1998). ISO 9000 certification is not a standardised package that can be applied in the same way in every organisation (Singels et al., 2001). ``The standards only recommend the essential elements of a proper quality assurance system, without recommending the ways to apply them (Tsiotras and Gotzamani, 1996, p. 66). ISO 9000 is a management control procedure (Yahya and Goh, 2001), which involves a business in documenting the processes of design, production and distribution to ensure that the quality of its products and services meets the needs of customers (Quazi et al., 2002; Pun et al., 1999). ISO 9000 is a family of standards and guidelines on how to develop a quality management system to manage the processes that affect products or services (Quazi et al., 2002), and they are voluntary (Calisir et al., 2001). The family is made up of five separate standards or guidelines: ISO 9000; ISO 9001; ISO 9002; ISO 9003 and ISO 9004 (Wayhan et al., 2002). ISO 9001, 9002 and 9003 are conformance standards for quality assurance systems and relate to supplier-customer relationships. ISO 9000 and 9004 are guidelines and relate to the development of quality systems within the company (Ragothaman and Korte, 1999). ISO 9001 applies to facilities that design, develop, produce, install and service their own products. ISO 9002 applies to firms that provide goods or services consistent with the specification furnished by the customer. ISO 9003 applies to final inspection and test procedures only. Therefore, the objective of these standards is to provide an effective quality system reflecting a companys practices for producing goods and services that conform to requirements (Pun et al., 1999; Halis and Oztas, 2001). ISO 9000 is more to do with achieving conformance to pre-determined standards than it is to do with instilling the concept of excellence associated with a customer

responsive management (Davis and Manrodt, 1996), or a customer value delivery orientation throughout an organisation (Woodruff, 1997). Najmi and Kehoe (2001) and Heras et al. (2002) suggested that ISO 9000 presents a sound basis for assuring the customer of the quality of products and services, as well as the processes that create them. One of the main requirements for acquiring the ISO 9000 standard is that a firms quality system must be documented (Curkovic and Pagell, 1999). This is generally at two levels, a quality manual and a procedures manual (Nwankwo, 2000). However, the registration process for the ISO 9000 standards consists of an audit of the implementation of a companys documented quality system after it has been verified and seen to conform to the requirements of the applicable ISO 9000 standard. A third party implements the audit (Ofori and Gang, 2001; Abraham et al., 2000). Registration is dependent on periodic follow up audits. Organisations wishing to remain registered must always maintain their quality system compliant to ISO standards.

ISO 9000 and business performance

The International Organisation for Standardisation, National Accreditation Registrars and third party accreditation bodies in Europe and the USA all make claims that ISO 9000 certification leads to improvements in business performance (Dick, 2000). The British Standards Institute (BSI, 2000, p. 1) stated that:
. . . the consequent benefits of registration are, needless to say, substantial. You should expect greater responsibility, accountability and quality consciousness among your staff. Better use of time and resources. Greater consistency and traceability of product or service. Less wastage through product or service failure. Continual improvement to your quality and efficiency. Improved profit. Wider market opportunities.

A number of recent studies have examined the impact of ISO 9000 implementation on organisational performance and suggested that the adoption of ISO 9000 has been justified in terms of many benefits associated with its implementation. Sun (1999) investigated ISO 9000 certification in Norwegian companies and found that it was significantly correlated with quality results, especially the reduction of defective products and customer complaints, and the improvement of business performance such as profitability and productivity. Tan and Lim-Teck Sia (2001) investigated the benefits

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of ISO 9000 among a sample of 100 Malaysian companies. The study found a number of benefits: improved communication within the organisation (78 per cent); improved product quality (63 per cent); increased process efficiency (53 per cent); improved human resource management (41 per cent); reduction in production costs (31 per cent); increased market share (12 per cent) and improved export potential (12 per cent). The UK research of Mann and Kehoe (1994) noted that quality certification was associated with improved business performance at the operational level, while Buttles (1996) survey of 1,220 certified UK companies found that improving operations as well as marketing gains were claimed by most of the firms following quality certification. Similar findings were found by Casadesus et al.s (2000) study of 500 Spanish firms. Further afield in Singapore, Quazi and Padibjo (1998) found, in addition to marketing gains, improvements in product quality. Another study reported by Heras et al. (2001) demonstrated that organisations which have implemented ISO 9000 systems have managed to achieve continuous enhancement and improvement and a better-run organisation. Sissell (1996) surveyed 1,880 respondents and found that 95 per cent of companies had reported internal benefits such as better documentation, greater quality awareness by employees, enhanced internal communication and increased operational efficiency, while 85 per cent had experienced external benefits such as higher perceived quality, competitive advantage, reduced customer quality audits, improved customer demand, increased market share and quicker product to market. A study conducted by Zhang (2000) reported that registered firms tended to achieve improvement in employee morale and personal accountability for job performance as a result of employees understanding their role in the total process. However, recent empirical studies have concluded that the most important benefits sought from ISO 9000 are profit improvements, process improvements and marketing benefits (Wayhan et al., 2002; Aarts and Vos, 2001; Eklof et al., 1999). Moreover, financial benefits have been found in certified companies; they had a significantly higher rate of return than before they were certified (Heras et al., 2002). Supporting evidence from Lee et al. (1999) indicates that the majority of organisations investigated were happy with the benefits derived from ISO 9000. A high percentage of the companies agreed with the following benefits having been achieved: clearer work procedures (96 per cent); improved quality of products and services (88

per cent); improved team spirit (77 per cent); a better control of subcontractors (73 per cent); increased efficiency (65 per cent) and less customer complaint (62 per cent). The implementation of ISO 9000 is a vital component in achieving business performance and customer satisfaction in organisations (Leung et al., 1999; Rahman, 2001; Escanciano et al., 2001; McAdam and Canning, 2001). There is, however, some evidence that being ISO 9000 registered does not guarantee improved performance due to the high explicit and implicit costs associated with implementation. Stevenson and Barnes (2001) identified four factors that tend to generate costs in achieving ISO 9000: time, training, consultants and the registration itself. According to Street and Fernie (1993) and Mo and Chan (1997), many manufacturers found ISO 9000 registration too expensive, time consuming, too formalised and impersonal. The costs of ISO 9000 tend to vary depending on the suitability and efficiency of existing systems and the competence of the staff (Mo and Chan, 1997). Therefore, the cost of ISO 9000 certification has been identified as a major complaint against the standard (McTeer and Dale, 1994; Stevenson and Barnes, 2001).

Research methodology
This research is exploratory since it is mainly about investigating ISO 9000 implementation among certified manufacturing companies in Saudi Arabia. This study was designed to cover as broad a range of the heterogeneous certified population as possible, therefore, a questionnaire was used as the basis for primary data collection. This method was chosen because it is a cheaper and quicker procedure than interviews, and more appropriate when dealing with sensitive issues because it offers respondents complete autonomy and confidentiality (Babbie, 1998). A questionnaire was developed based on an extensive review of the literature on ISO 9000. Much care was taken in designing the questionnaire to achieve the required objectives and eliminate bias. To facilitate subsequent analysis, it was decided to formulate closed questions, with a fixed range of possible answers. In this way, all those surveyed replied within the same restricted range and it was easier to make a comparative analysis of participants opinion. The questionnaire design relied on the use of a five-point Likert scale to ascertain the degree of agreement or the

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extent of respondent evaluation, and to establish numeric results for statistical analysis. Having designed the questionnaires, a pilot study was conducted using seven quality managers in the city of Jeddah. The piloting was carried out using face to face interviews. Based on their responses, certain adjustments were made to the wording of the questionnaire, to improve clarity in the final draft; 140 questionnaires were distributed to quality managers. This method was chosen to ensure the highest possible response rate because of the small size of the population in general, which had been suggested by lead assessors conducting registration in Saudi Arabia to be some 140 certified manufacturing companies. A total of 97 completed questionnaires were collected, of which 14 were unusable, leaving 83 for analysis, representing a response rate of 59.2 per cent. The response rate was satisfactory, as Saunders et al. (1997) suggested the response rate of the delivery and collection method to be between 30 per cent and 50 per cent. Following the data collection stage, the responses were coded to enable them to be computer processed. The statistical package for the social sciences (SPSS) for windows computer programme was used to achieve the best results.

Figure 1 Classification of ISO 9000 certification by ownership status

Research results and analysis

Profile of the certified firms in Saudi Arabia
The total number of employees working in each firm determined the size of the firms in the study. Certified firms in Saudi Arabia are largely small- and medium-sized firms with at least 300 workers (65.5 per cent, of which only 21.7 per cent of the total were small firms). Certified organisations employing more than 300 employees represented 38.6 per cent of the total sample. Small- and mediumsized firms in Saudi Arabia constituted the largest portion of respondents. However, in terms of ownership, Figure 1 suggests that the majority of firms were joint ventures with foreign corporations abroad, representing a large percentage of 45.8 per cent. This could mean that such firms are concentrating on international markets, since exporting to certain countries may require an ISO certificate. In addition, joint ventures are influenced by their mother companies or partners abroad, which are more aware of ISO and more developed in terms of ISO registration. Saudi private firms ranked second, representing 38.6 per cent of the sample. This relatively large percentage is not unusual, since the majority of organisations in Saudi Arabia are privately

owned. The remaining 15.6 per cent is made up of companies owned by the government and private sector and Saudi corporate. With respect to the Saudi companies involvement in export, the vast majority of firms in the study (89.2 per cent) were involved in export to different degrees, while 11.3 per cent of the sample were not involved in export at all. Export involvement is identified to be an important factor associated with ISO 9000 implementation since one very important criterion associated with exporting is that of obtaining ISO 9000 certification. In terms of ISO certification type, 63.9 per cent of certified manufacturing companies in Saudi Arabia were registered to ISO 9002, while the remaining 36.1 per cent were registered to ISO 9001, almost two thirds of firms registered to ISO 9002 and one-third to ISO 9001. This is due to the fact that a large percentage of the Saudi firms were joint ventures (45.8 per cent) and such firms received design and technology support (ISO 9001 deals with design issues) from their foreign partners. Therefore, the design issue was usually not dealt with in Saudi firms. This might be the most important reason why the majority of firms were registered to ISO 9002. Figure 2 shows that the vast majority of manufacturing firms in Saudi Arabia (84.1 per cent) have been registered for less than five years and 8.5 per cent have been registered to ISO for less than one year. Manufacturing firms registered to ISO for between one and three years represented 37.8 per cent of the total sample, while 37.8 per cent had been registered to the standard for between three and five years. Firms with ISO certification for more than five years represented 15.9 per cent of the total sample. It is clear that ISO 9000 certification in Saudi Arabia is a relatively new concept. The majority of certified manufacturing companies were

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Figure 2 Duration of ISO 9000 registration

located in Jeddah (32.5 per cent), Riyadh (21.7 per cent) and Jubail (16.9 per cent).

Benefits gained from ISO implementation

Any management plan and certification demands that, once it has been executed, the degree of effectiveness must be tested in order to evaluate whether or not the preestablished objectives and expectations have been met. The present study suggested 20 possible benefits of ISO 9000 and asked participants to rate the extent to which ISO affected such elements. The rating was from ``crucial effect to ``no effect. The results are illustrated in Table I. By examining the results in Table I, increased quality awareness (4.25) and improved efficiency of the quality system (4.16) seemed to be the principal positive

outcomes and benefits from ISO 9000 in manufacturing companies in Saudi Arabia. It seems clear that ISO 9000 had acted as an alarm to all employees, signalling the importance of quality in their organisations. This supports the claim of Yung (1997) that ISO 9000 provides quality awareness. Improvement of quality system efficiency is a tangible direct effect since ISO 9000 includes mainly requirements for a better quality system. The improvement of the quality of products ranked fourth among all benefits, which was reasonable since ISO is not designed to address the quality of product but the efficiency of the quality system. However, an efficient quality system may contribute to a better quality of product. In addition, ISO contributed to better customer care since the two elements associated with customers ranked third and sixth. Those elements were an improvement in customer service and a reduction in customer complaints. The marketing benefits of ISO 9000 were not among the leading ones. Comparing the findings on the main positive outcomes of ISO 9000 implementation in Saudi Arabia to other studies, Erel and Ghosh (1997), Buttle (1997), Dissanayaka et al. (2001), Escanciano et al. (2001), Leung et al. (1999) and Calisir et al. (2001) looked at the main benefits of ISO 9000 implementation. These studies were similar to the present study and they suggested that the most important benefits gained from implementing ISO 9000 were: increased

Table I Benefits of ISO 9000 implementation R an k 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Be nefits Inc re ased qua lity a w aren ess in th e firm s Im pro ved the efficiency of the quality system Im pro ved cus tom er servic e Im pro ved the qu ality o f produ cts Im pro ved in sp ectio n m ethod s a nd tim e to prod uce finished go ods Re duced c ustom er c om plaints Im pro ved in sp ectio n m ethod s a nd tim e to rece ive in com in g m aterials Im pro ved the qu ality o f inc om in g m ate rials Re duced d efe ctive ra te a nd w a stes Im pro ved staff m o tivation Im pro ved em p lo yee rela tions Im pro ved the spe ed of good delivery Im pro ved pro ductivity Im pro ved sup plie r relation s M a intained/ ga ine d m arket share Im pro ved pro cess d esign Re duced c osts Im pro ved pro fita bility Im pro ved pro duct design Inc re ased exp orts M e an a 4 .25 4 .16 3 .67 3 .57 3 .53 3 .46 3 .42 3 .36 3 .32 3 .30 3 .14 3 .13 3 .06 3 .02 2 .98 2 .94 2 .87 2 .75 2 .54 2 .38 S td. de v. 0.66 0.76 0.91 1.13 1.17 1.02 1.17 1.06 0.89 1.00 1.10 1.04 1.10 1.10 1.18 1.36 0.95 1.10 1.38 1.31

N ote : a Th e sc ale is 5 = crucial effec t; 4 = grea t e ffect; 3 = som e e ffec t; 2 = little effe ct; 1 = no effec t [ 317 ]

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quality awareness, improved efficiency of the quality system; improved customer service; use of ISO as a promotional tool; improved product and service quality and improved supplier relations. However, it is evident that an increase in quality awareness represented the most important benefit in Saudi Arabia, Turkey (Erel and Ghosh, 1997) and Wetern Australia (Brown and Van der Wiele, 1995). Comparison among the results of Saudi Arabia, Turkey (Erel and Ghosh, 1997), Western Australia (Brown and Van der Wiele, 1995), and the UK (Buttle, 1997) suggested that the most common and significant benefits among the studies were: an improvement in customer service; an improvement of the quality systems efficiency; and an improvement of product quality. In order to condense the number of benefits and group them into factors and identify any existing relationship between factors in each group, factor analysis of the benefits of ISO 9000 was used through the principal component approach with varimax rotation. The analysis resulted in five factors (see Table II), each of which included a number of benefits of ISO. Benefits that had loadings of 0.65 or greater based on the sample size were chosen (Hair et al., 1995). ISO 9000 implementation benefits were reduced to 11 under five factors. In order to test the factor analysis, the Kaiser-Meyer-Olkin test (KMO) is an indicator of how well suited the sample data is for such analysis and its value is less than 1. The acceptable value should be

between 0.5 and 0.99. The KMO value was good (0.853), indicating that the data were suitable for factor analysis and, consequently, that the factor analysis was valid and reliable. The second test was Batletts test of sphericity, which measures the correlation among variables. The test was significant (0.000), which means that there was a correlation among the benefits of ISO 9000 in the Saudi Arabian study.

Costs of ISO 9000 implementation

The costs of ISO 9000 implementation have been criticised (Curkovic and Pagell, 1999). Recent studies have confirmed that ISO 9000 registrations are too expensive, too time consuming, too formalised and impersonal and that costs are greater than the benefits derived (Augustyn and Pheby, 2000; Stevenson and Barnes, 2001; Dick, 2000; Street and Fernie, 1993). This section focuses on three cost issues: 1 Internal costs (costs of training, reorganisation, hiring new employees, education, etc.). 2 Consultancy fees (fees paid to external consultants). 3 Registration agencies fees (fees requested by the registration agencies for application, pre-assessment audit, audit and surveillance visits). From Table III it is clear that the highest costs associated with ISO 9000 implementation in Saudi Arabia were the internal costs that resulted from firms reorganising themselves for certification. The

Table II Factor analysis of the benefits of ISO 9000 B en efits o f ISO 90 00 F ac tor 1 : Intern al bene fits eig enva lue = 3 .4 4 6 : perc e ntag e of v arianc e = 1 7 .2 3 0 ) Im proved staff m otivatio n Im proved cu stom er se rvice Increa sed qua lity aw aren ess w ithin the firm Im proved effic ien cy of the q uality system F ac tor 2 : M ark et ing benefits eig e nva lue = 3 .1 6 8 : p erc e ntag e of varianc e = 1 5 .8 3 8 ) M aintain ed/ga ined m arket sha re Increa sed exp orts F ac tor 3 : E ffic ienc y benefits eig en value = 3 .0 4 4 : p erc en ta g e of va rianc e = 1 5 .2 2 2 ) Im proved spee d o f good delivery R edu ce d co sts Im proved supp lier rela tions F ac tor 4 : Ins pec tion be nefits eig env alue = 3 .0 4 1 : perc entag e of varia nc e = 1 5 .2 0 5 ) Im proved in sp ectio n m ethods an d tim e to p roduc e finished goo ds Im proved in sp ectio n m ethods an d tim e to re ceive inco m ing m ate rials F ac tor 5 : Q ua lity be nefits e ig env alue = 2 .0 0 6 : perc entag e of varian c e = 1 0 .0 3 2 ) R edu ce d de fec t and w a sta ge ra te s Loadin gs 0.761 0.715 0.714 0.679 0.821 0.732 0.803 0.704 0.651 0.764 0.750 0.734

N ote s: Stastical tests: KM O = 0.85 3; B artlett: ap proxim a te chi-squ are = 921.567 ; df = 190 ; sig. = 0.000 [ 318 ]

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average internal costs among all firms were more than 208,000 Saudi Riyals (SR, 1 Sterling is equivalent to 6 Saudi Riyals), representing 66.8 per cent of all three sources of costs. However, it can also be seen that the cost of registration represented the lowest cost, with organisations in Saudi Arabia paying more money to get themselves ready for ISO 9000 certification. In comparing findings from this result to the USA, Irwin, Dun and Bradstreet Information Services (1996) investigated the costs of ISO 9000 implementation in the USA, and suggested that internal costs were the highest costs associated with ISO 9000 implementation, while registration fees were the lowest. Their study was similar to the present study in Saudi Arabia (see Figure 3). Therefore, Irwin and Dun and Bradstreet Information Services (1996) support the findings from the present study. A cross-tabulation was performed, classifying the participant companies into their respective size (small, medium and large), in order to determine the average costs according to the size of the participating firms. This analysis reveals that the bigger the firm, the higher the cost of implementing ISO 9000. The greater differences occurred in terms of internal costs, which were still the major costs of ISO 9000 implementation among the different sizes of organisations. In order to determine and evaluate the benefits and costs of ISO 9000 implementation in Saudi Arabia, respondents were provided with six alternatives in order to evaluate

benefits gained from ISO 9000 versus the costs of implementation. Moreover, they were given the opportunity to refrain from judgement if they were not sure whether or not the benefits of registration outweighed the costs involved. Table IV shows that the majority of certified companies in Saudi Arabia considered the benefits gained from ISO 9000 certification to have exceeded the costs of implementation. Therefore, it is evident that certified companies in Saudi Arabia had a strong positive opinion about the benefits of ISO 9000 when compared with the costs of implementation.

Evaluation of ISO 9000

This section intends to evaluate ISO 9000 in Saudi Arabia by determining the level of satisfaction Saudi firms felt with ISO 9000. By examining Figure 4, it is clear that the majority of the certified manufacturing firms in Saudi Arabia were generally satisfied with the standard, where 43 per cent of the respondents were very satisfied with the standard and 51.9 per cent of the participants were satisfied with it. These findings from Saudi industry concerning levels of satisfaction with the standard support the claims of many scholars who have written about ISO 9000, such as Johnson (1997), Yung (1997) and MacAdam and Canning (2001). In addition, these findings support the findings of Vloeberghs and Bellens (1996) in their study of ISO 9000 in Belgium. They found that 65 per cent of the Belgian respondents were satisfied with ISO 9000 and 22 per cent were very satisfied with it. The conclusion here is that both sets of findings were close in that there was a high level of satisfaction in both countries with ISO 9000. Two statistical procedures (comparing the mean and the Kruskal-Wallis test) were performed to determine the level of satisfaction with ISO 9000 among small, medium and large organisations in Saudi Arabia. The results of this analysis suggest that the larger the firms the higher their level of satisfaction with ISO 9000. This means that large firms tended to be more satisfied with ISO 9000 than smaller ones.

Table III Costs of implementing ISO 9000 in Saudi Arabia in Saudi Riyals (SR)a N o. Types of costs Ave rage 208,212 .12 65,595 .50 37,688 .62 311,496 .24 P ercen tage of total ave ra ges 66 .80 21 .10 12 .10 100 .00

1 Inte rn al costs for the firm 2 Co nsulta ncy fees 3 Re gistra tion a ge ncies fees To ta l averag es N ote: a 1 sterlin g = 6 Sau di R iyals a pproxim ate ly

Figure 3 Comparison between Saudi Arabia and the USA in the costs of ISO 9000 implementation

Conclusion
ISO 9000 certifications in Saudi Arabia have started to grow rapidly, as has been the case in many other countries. Although the experience of ISO 9000 implementation has been tested and evaluated, though only to a limited extent in many countries, no study has been focused on Saudi Arabia. Therefore, this study was carried out to examine ISO

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9000 implementation in manufacturing companies in Saudi Arabia. To achieve the purpose of the study, 140 questionnaires were distributed to all possible known firms holding an ISO 9000 certificate. A total of 97 questionnaires were returned, of which 83 were considered usable, representing a response rate of 59.2 per cent. With regard to ISO certification type, 63.9 per cent of certified manufacturing companies in Saudi Arabia were registered to ISO 9002, while the remaining 36.1 per cent were registered to ISO 9001. None of the respondents were registered to ISO 14000 for environmental management. This may imply that Saudi industry is less concerned about the environment, but this could, in fact, be because industry has not grown to such an extent that it poses a threat to the environment. In addition, the main reason could be a lack of awareness in industry about the environment, an unwillingness to bear extra costs for this purpose, and the absence of regulations relating to environmental issues in the country. The study also suggested that the vast majority of manufacturing firms in Saudi Arabia (84.1 per cent) had been registered to ISO for less than five years, and 8.5 per cent for less than one year. ISO 9000 certification in Saudi Arabia is a relatively new concept. Export involvement has been identified to be an important factor associated with ISO 9000 implementation since one very important prerequisite for exporting is that of obtaining ISO 9000 certification.

Table IV Costs of implementing ISO 9000 vs benefits gained from certification C rite ria B en efits ex ceed the c osts co nside rably B en efits ex ceed the c osts B en efits are e qual to the co sts B en efits are le ss than th e c osts B en efits are c onsiderably less tha n th e costs It is ha rd to ju dge To ta l Figure 4 Levels of satisfaction with ISO 9000 Freq uenc y 34 27 4 6 0 11 82 Pe r ce nt 41.5 32.9 4.9 7.3 0 13.4 100.00

An increase in quality awareness, an improvement in quality system efficiency and an improvement in customer service were found to be the most important benefits gained from ISO 9000 implementation. Yung (1997) has supported these findings. Moreover, Erel and Ghosh (1997) in Turkey, and Brown and Van der Wiele (1995) in Western Australia found that creating quality awareness was the most important benefit of ISO 9000 implementation, as in the case of Saudi Arabia. Factor analysis was used to group the benefits, which resulted in five factors representing all of the benefits: these were internal benefits, marketing benefits, efficiency benefits, inspection benefits and quality benefits. With regard to the cost of ISO 9000 implementation in Saudi Arabia, the study revealed that internal costs were the highest, representing approximately 67 per cent of total costs, followed by consultancy fees, making up 21 per cent, while the fees of registration agencies accounted for only 12 per cent. Further analysis was performed to determine the average costs in each size of participating firm. This analysis suggested that the smaller the firm, the lower the costs of implementation and vice versa, and the greater the difference between size of firm the more this was reflected in terms of internal costs. Internal costs were still the major costs of ISO 9000 implementation among the different sizes of organisations. When evaluating the level of satisfaction with ISO 9000 in Saudi firms, it was found that the majority of the respondents seemed to be satisfied with the standard. Moreover, the larger the firm, the more likely they were to be satisfied with the standard and would tend to recommend it to others. It is safe to conclude that Saudi firms have identified the standards as formalised systems for evaluating the ability of their organisations to design, produce and deliver quality products and services. They have also been identified as important to achieve organisational success and long term survival in the Saudi economy.

References
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Further reading
Dale, B.G. (1999), Managing Quality, Basil Blackwell, Oxford. Zhang, G. (1999), ``Beyond ISO 9000 certification a China experience, Managerial Auditing Journal, Vol. 14 Nos 1 and 2, pp. 75-8.

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