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C. Capmany et al. / International Food and Agribusiness Management Review 3 (2000) 41-53
in waste entails a higher level of efficiency for the firms working under the QMS. Similarly,
the reduction in nonconformities can be viewed as a component of enhanced efficiency
through tighter process control. Regarding the small reduction in costs, it can be said that the
costs due to the implementation and maintenance of ISO 9000 certification are offset by a
perceived reduction in total costs. Even though the costs of implementing and maintaining
the QMS were regarded as significant arguments against ISO 9000, the results suggest that
the risk of investing any capital and labor on the certification project, was well taken.
Special attention has to be paid to the way that respondents ranked Firm’s Image. Both
groups reported an increase in this category after certification, but agribusiness firms reported
a smaller value. Although the t test suggests that there is no statistically significant difference
between the means of the two samples (e.g., at the 10% level), the nonparametric test rejects
the null that the medians are equal at the 10% level. This suggests that the agribusiness
subsample appears to be drawn from a distribution lying to the left of the larger sample. The
lower values recorded by the agribusiness sector may be attributed to the fact that many
agribusiness goods convey no information to the general public about the system under
which the item is produced. 5 of the surveyed agribusiness firms stated that they produced
final goods. This in turn means that very little, or no, further processing is required of these
goods before reaching the final consumer. A certified firm is not allowed to use the ISO 9000
logo on its products (Jedd, 1993). Because of this, someone buying an “ISO orange” in a
supermarket cannot tell the difference between that product and an orange produced by a firm
that was not ISO certified. In this way it is logical to assume that firms producing final goods
destined for the general public cannot expect, and will not perceive, the company’s image of
the firm to be enhanced by ISO certification. In this sense ISO differs from an environmental
endorsement, certification, or label or green seal that can be displayed on the product’s
packaging (e.g., dolphin safe canned tuna).
5.4. Changes in cost components after becoming ISO 9000 certified
Because the expense of ISO certification has always been perceived as one of the possible
barriers towards implementation, special attention was paid to the different costs areas that
could be affected after the QMS was in place. A detailed summary of the most important cost
components is presented in Table 5. The biggest cost increases for all firms were in the areas
of audits and personnel. This result is to be expected because the basis of the ISO series is
a strong system of internal and external audits along with the documentation of processes.
These activities foretell the use of more employee time and resources to complete the audits
and address any identified nonconformances. Agribusiness firms reported a greater increase
in personnel costs than that reported by firms in other industries. Conversely, the other
industries reported greater increments in the costs accrued to audits as compared to agri-
business. This situation could be explained by the fact that agribusiness audits may require
more labor, whereas the audits for a conceivably more complex production process observed
in non agribusiness firms may require additional sophisticated calibration equipment and less
personnel, thereby incurring higher overall costs.
As for the other components measured in Table 5, the biggest decrease in costs was
reported in the areas of waste and product rejections. These two cost components ranked