A study on the ISO 14000 certification and organizational performance of Indian manufacturing firms

Purpose – The purpose of this paper is to identify the critical factors (CFs) of ISO 14000; to determine if ISO 14000 certification results in improved organizational performance; and to analyze the levels of and changes in these CFs and levels of and changes in the indicators of organizational performance (IOPs) in relation to firm attributes considered in the present study. Design/methodology/approach – The study employs questionnaire‐survey approach to obtain the practitioners' perceptions of ISO 14000 certification, levels of presence of CFs and changes in CFs due to certification, levels of presence of IOPs and changes in IOPs due to certification. The data collected have been analyzed by using statistical techniques. Findings – The firms regard the preparation for emergencies as an integral part of environmental management system (EMS), and they seem to initially struggle to identify environmental issues that are to be given higher importance. Further, the certified firms find it difficult to continuously improve their environmental management processes. There are significant changes in all the CFs and IOPs due to ISO 14000 certification. Furthermore, more‐experienced firms have higher mean values of levels of all CFs, in comparison with less‐experienced firms. In the course of time, these firms appear to understand the EMS and effectively implement it in order to realize long‐term benefits. Research limitations/implications – Results of the study are dependent on the nature and number of respondents, i.e. on the perceptions of the top management responsible for quality certification, and the sample size (number of respondents in the current study is 36 due to limited response rate and other operational constraints). Practical implications – The present study would enable the practitioners to benchmark their organizations (in respect of levels of presence of CFs and levels of presence of IOPs) with those of their competitors, with the best‐in‐class, and also with the industry's mean level. The study also enables one to compare different categories of firms (e.g. firms with low, medium and high levels of turnover; national and international firms; etc.). Since, there is a significant improvement in the organizational performance due to certification, the study provides a strong empirical justification for non‐certified firms to go in for ISO 14000 certification. Originality/value – The study conceptualizes ISO 14000 as a seven dimensional framework. Further, it has also identified several IOP related to ISO 14000 certified firms. A questionnaire has been developed to obtain the perceptions of top management about the ISO 14000 certification and related factors and indicators; the proposed instrument can be used for several purposes such as functional benchmarking.