The performance evaluation and comparison based on enterprises passed or not passed with ISO accreditation : An appliance of BSC and ABC methods

Purpose – The purpose of this paper is to determine whether passing ISO accreditation can effectively enhance business performance, and further to explore the major contributions of ISO accreditation for companies. Although there are some current debates on the effectiveness of ISO9000, for many companies having ISO9000 accreditation is mainly for marketing purposes. However, no company really knows the detailed performance effects of ISO accreditation. In this study, both the Balanced Scorecard (BSC) and Activity Based Costing (ABC) methods are used to compare the direction and strength of each performance indicator for companies that have passed, or not passed, ISO accreditation. Design/methodology/approach – Companies in the manufacturing industry and service industry, with stocks listed in Taiwan's regular stock market and over‐the‐counter stock market, are selected as the research targets. A total of 212 valid questionnaires from the manufacturing industry and 120 from service industries are collected for further analysis of business performance using the BSC method. In addition, ABC measures are used to compare the performance difference through objective financial data. Findings – Through qualitative and quantitative methods, this study develops key measurement indicators along four performance constructs based on the Balanced Scorecard. These include 38 indicators for the manufacturing industry and 32 indicators for the service industry. Through evaluation and comparison, the study shows that the pass of ISO accreditation by an enterprise can enhance its business performance and financial benefits. Higher effects are especially apparent in the manufacturing industry. Originality/value – This study uses the concept of the BSC to construct performance measurement indicators and to evaluate the business performance of enterprises. In addition, the differences in business performance attributed to the pass or fail of ISO accreditation have been compared through BSC and ABC methods. From the performance analysis, it can clearly analyze the difference displayed by enterprises that have passed or not passed ISO accreditation. These results can be referenced by different industries when performing performance evaluation and strategy making.