Does the quality management system affect working capital management efficiency? : evidence from Polish firms

This study explores the impact of adopting the quality management system according to the International Standardization for Organizations (ISO) standards called ISO 9001 on firms' working capital management efficiency (WCME). This study analyzes Small- and Medium-Sized Enterprises (SMEs) in the Polish construction industry. Regression analysis, difference tests, and robustness checks were conducted to achieve the goals of this study. The regression analysis results confirm a limited positive relationship between firms implementing ISO 9001 and WCME. Additionally, the difference tests show no significant differences in WCME between firms that implemented ISO 9001 and those that did not. During the coronavirus pandemic, a sharp decrease in inventory management costs was observed in firms. Inventories did not linger in warehouses, so they did not generate unnecessary costs, but were quickly sold at high margins. The inventory turnover rates on different days were low. These results suggest that controlling stock levels and receivables during crises is essential because payment bottlenecks and delayed deliveries can occur quickly. The insights generated from this study demonstrate that Polish SMEs in the construction industry fail to realize optimum WCME. Therefore, policymakers in Poland must improve managers' and shareholders' awareness of the usefulness of working capital management (WCM).