Efficiency of Management System Certification: Evidence from the Chinese Manufacturing Industry

Abstract

Implementation and certification of management systems represented by ISO 9001, ISO 14001, and OHSAS 18001 have been major activities of organizations motivated by both internal incentives and external pressures. Nevertheless, studies on the effectiveness of such certifications in fostering corporate sustainable development have revealed mixed and ambiguous findings. In addition, most research in this field remains focused on specific performance indicators while ignoring other criteria, especially the factors pertaining to the Triple-bottom Line concept. Lack of a unified evaluation framework also leads to divergent views on the true benefits of certification. Grounded in the dynamic capability theory and the corporate sustainable development concept, this study provides insights into the efficiency evaluation of certified management systems in a Chinese context, by developing a heterogeneous inputs-outputs analytical framework. Comprehensive comparisons among firms with various certification statuses are conducted to observe the effects of certified management systems in facilitating corporate sustainable development. This study further sheds light on the assimilation, integration, synergetic, and cumulative effects of certification by taking temporal and spatial factors into account. With the help of a Data Envelopment Analysis (DEA)-based nonparametric approach and Tobit estimation technique, the hypotheses are tested using longitudinal data of 73 Chinese-listed firms from the manufacturing industry between 2009 and 2012. The findings reveal that the firms increasingly certified their management systems and preferred to obtain multiple management system standards during these four years. Certifications, especially the integrated ones, served as effective approaches to facilitate the firms to become efficient by exerting assimilation and integration effects. Additionally, the synergetic and cumulative effects of certification in improving corporate sustainable efficiency both appeared in the sample. The findings imply that firms in China that need to grow in a green way can identify multiple certified management system standards as effective approaches to achieve corporate sustainable development.