A competitive advantage from the implementation timing of ISO management standards

• DOI: http://doi.org/10.1016/j.jom.2015.03.004
• Author: Hung‐Chung Su,Suvrat Dhanorkar,Kevin Linderman
• Date: 01 July 2015
• Published date: 01 July 2015

Journal

of

Operations

Management

37

(2015)

31–44

Contents

lists

available

at

ScienceDirect

Journal

of

Operations

Management

j

o

ur

na

l

ho

mepage:

www.elsevier.com/locate

/jom

A

competitive

advantage

from

the

implementation

timing

of

ISO

management

standards

Hung-Chung

Sua,∗,

Suvrat

Dhanorkarb,

Kevin

Lindermanc

aOperations

Management,

College

of

Business,

University

of

Michigan-Dearborn,

Dearborn,

MI,

United

States

bSupply

Chain

Management,

Smeal

College

of

Business,

Pennsylvania

State

University,

University

Park,

PA,

United

States

cSupply

Chain

and

Operations,

Carlson

School

of

Management,

University

of

Minnesota,

Minneapolis,

MN,

United

States

a

r

t

i

c

l

e

i

n

f

o

Article

history:

Received

8

February

2014

Received

in

revised

form

17

February

2015

Accepted

17

March

2015

Available

online

17

April

2015

Accepted

by

D.R.

Guide

Keywords:

ISO

9001

ISO

14001

Management

standards

Competitive

strategy

Absorptive

capacity

Early

mover

advantage

a

b

s

t

r

a

c

t

With

the

rise

of

globalization,

firms

increasingly

implement

management

standards

developed

by

the

International

Organization

for

Standardization

(ISO)

to

assure

they

can

meet

their

customers’

expecta-

tions.

ISO

management

standards

reduce

performance

variability

among

suppliers

and

promote

global

trade.

However,

ISO

standards

also

promote

a

certain

degree

of

commonality

or

isomorphism

between

firms.

If

the

very

notion

of

‘standards’

encourages

a

certain

level

of

commonality

between

firms,

then

how

can

firms

achieve

a

competitive

advantage

from

implementing

ISO

standards?

This

research

argues

that

the

timing

of

when

a

firm

implements

an

ISO

standard

relative

to

their

rivals

has

strategic

bene-

fits.

Drawing

on

the

competitive

dynamics

literature

we

argue

that

firms

can

achieve

an

early

mover

advantage

when

implementing

ISO

14001.

However,

an

early

mover

advantage

depends

on

the

level

of

a

firm’s

absorptive

capacity

(prior

experience

with

ISO

9001)

and

the

competitive

intensity

of

their

indus-

try.

This

study

uses

longitudinal

data

from

firms

that

implemented

ISO

14001

at

varying

points

in

time

to

examine

the

benefits

of

an

early

mover

advantage.

More

broadly,

this

research

sheds

light

on

when

firms

benefit

the

most

from

implementing

new

management

standards.

The

results

provide

insights

into

implementing

other

emerging

management

standards.

©

2015

Elsevier

B.V.

All

rights

reserved.

1.

Introduction

Increasingly

firms

implement

ISO

(International

Organization

for

Standardization)

management

standards

as

a

strategic

initia-

tive

to

remain

competitive

(King

et

al.,

2005).

For

example,

Ford

set

a

strategic

goal

to

have

all

its

manufacturing

plants

ISO

14001

certified

worldwide

by

1998

(Wilson,

2001).

IBM

had

set

a

similar

strategic

goal

of

worldwide

ISO

14001

certification

(Morrow

and

Rondinelli,

2002).

Many

organizations

have

dedicated

corporate

level

resources

to

evaluate,

monitor

and

implement

new

manage-

ment

standards

across

the

organization.

For

example,

3M

has

their

Strategic

Quality

Leadership

Team

take

responsibility

for

admin-

istering

various

management

standards

like

ISO

9001

and

ISO

14001.

This

team

“sets

strategy,

identifies

common

opportunities

for

improvement,

and

directs

global

synergy

across

all

business

units

within

3M”

(3M,

2012).

As

a

result,

firms

not

only

make

∗Corresponding

author.

E-mail

addresses:

hcsu@umich.edu

(H.-C.

Su),

dhanorkarsuvrat@gmail.com

(S.

Dhanorkar),

linde037@umn.edu

(K.

Linderman).

strategic

decisions

to

implement

management

standards,

but

also

look

for

synergies

across

standards.

Given

the

strategic

nature

of

ISO

standards

implementation,

the

question

becomes

how

does

implementing

a

standard

generate

a

competitive

advantage?

Strategy

scholars

argue

that

a

com-

petitive

advantage

comes

from

firm

heterogeneity.

For

instance,

the

resource-based

view

(RBV)

of

the

firm

argues

that

develop-

ing

unique,

valuable,

rare

and

non-replicable

resources

help

firms

gain

a

competitive

advantage

over

rivals

and

generates

rent

profits

(Barney,

1991).

However,

ISO

standards

promote

a

certain

degree

of

commonality

or

isomorphism

between

firms.

For

example,

cus-

tomers

may

require

their

suppliers

to

get

ISO

9001

certified

to

assure

a

certain

level

of

quality

performance.

ISO

9001

certification

reduces

the

heterogeneity

between

suppliers

in

terms

of

quality

performance.

If

the

very

notion

of

‘standards’

encourages

a

cer-

tain

level

of

homogeneity

between

firms,

how

can

firms

achieve

a

competitive

advantage

from

implementing

ISO

standards?

Research

is

inconclusive

on

the

competitive

benefits

of

imple-

menting

ISO

standards.

For

example,

some

research

has

found

a

positive

impact

of

ISO

9001

on

performance

(Corbett

et

al.,

2005;

Levine

and

Toffel,

2010;

Naveh

and

Marcus,

2005),

while

other

studies

do

not

show

a

significant

relationship

(Martínez-Costa

et

al.,

http://dx.doi.org/10.1016/j.jom.2015.03.004

0272-6963/©

2015

Elsevier

B.V.

All

rights

reserved.