ISO 9000 -- A MARKETING TOOL FOR U.S. AGRIBUSINESS



C. Capmany et al. / International Food and Agribusiness Management Review 3 (2000) 41-53

45


some other type (the percentages sum up to more than 100 due to double counting). Further,
2 of the respondents reported their products as inputs, 4 as intermediate goods, and 5 as final
products. It was also reported that 3 perceived their customers as being of medium size and
8 thought their customers were large within the industry. None of the respondents thought
their customers were small. The fact that a majority of the certified agribusiness firms seem
to be catering to larger customers may help explain part of the motivation of these U.S.-based
suppliers to pursue the ISO 9000 QMS. Larger companies, especially food retailers in Europe
(the agribusiness firms’ direct customers) are encouraging their suppliers to seek ISO
certification to help economize on their external (i.e., input-based) audit costs. ISO 9000
certification provides evidence of the QMS in place allowing large companies (i.e., custom-
ers) to assume that their product specifications will be met, and thereby minimizing the cost
of internal and external audits.

4.2. Certification status

Only 4 of the agribusiness firms were certified to ISO 9001 and 7 to ISO 9002. This result
may be explained by the lack of research or design components in the production processes
of these latter plants. Similar results were found for the U.K. (Holleran and Bredahl, 1997).
The average time for agribusiness firms to reach certification was 18 months. On average
agribusiness firms had been certified for 31.5 months.

Regarding the organizational structure of the firms, 7 of the respondents stated that their
firm was affiliated with a parent company, with 6 of these 7 firms having affiliates that were
also certified to the ISO 9000 series. This result may be expected because the initiative to
develop QMS such as ISO 9000 certification, which is plant based, often comes from a
central office. Indeed such involvement of top management is stressed as a crucial part of the
certification process. The decision to seek certification has to be backed up with allocated
resources from the highest levels of management for the process to be a success (Wenmoth
and Dobbin, 1994; Ho, 1994). In the case of those agribusiness firms surveyed, the decision
to become certified was generated internally (within the firm) in all cases, although 6 firms
stated that external forces like customer requirements also played a role in the decision.

4.3. ISO 9000 costs and benefits

The balance between the costs and benefits of ISO 9000 certification is one of the most
uncertain aspects of the QMS. The average cost (per plant) of becoming certified was
$101,400 with the maintenance of the certification status costing $26,500 per year (these cost
values are the means for 5 of the agribusiness plants that reported dollar amounts). These
costs are actually lower than those reported by the other firms ($146,800 for attaining and
$32,400 to maintain). When asked to compare the costs versus the benefits, 9 of the
respondents regarded the costs of becoming certified as low or moderate whereas only 2
regarded them as excessive. In the same manner, all respondents thought that the costs of
maintaining certification were low or moderate and none regarded these costs as excessive.

To measure if the respondents attached any implicit value to the ISO 9000 certificate, the
participants were asked if they were using their ISO 9000 status to promote their firm in any



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