Demon or Saviour? An Assessment of the ISO 9000 Quality Assurance Standards
Abstract: There exist conflicting assessments about the merits of the ISO 9000 series of quality assurance standards. In some cases this conflict arises because of a misperception that ISO 9000 is a product quality standard rather than a quality assurance standard. In addition, there is some uncertainty as to whether ISO 9000 acts to signal the quality of sellers or to screen sellers by their level of quality. The available evidence suggests that it is used in both modes with the exact mode used in a given situation depending on the nature of the good and transaction being considered. There is also a misperception that ISO 9000 is a European standard being used as a non-tariff trade barrier. It is argued that this is not the case and that ISO 9000 actually has a United States rather than a European pedigree. It is also argued that some of the conflicting assessments about the merits of ISO 9000 can be shown to occur because some firms will find adopting it profitable, while other firms will not. Finally, it is argued that the development of ISO 9000 has likely led to some benefits from the standardisation of quality assurance standards, but not at a level originally envisaged when it was developed.
Keywords: asymmetric information; quality assurance standards; ISO 9000; adoption patterns; suppliers; quality.
JEL Classification: D82; L15; M20.