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Meta-standards, financial performance and senior executive compensation in China: An institutional perspective

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  • Lo, Chris K.Y.
  • Yeung, Andy C.L.
  • Edwin Cheng, T.C.

Abstract

We examine the relationships between number of business certifications and financial performance and senior executive compensation in Chinese manufacturing companies. The results show that the number of certifications obtained by a firm is significantly correlated with the compensation of the firm's senior management, but not with the firm's financial performance. We also find that ISO 9000, when adopted for the sake of meeting market institutional expectations, increases the operating cycle time of the certified firm. Our findings offer a clue to the cause of the popularity of meta-standards in China--executives adopt popular management techniques under an institutionalized environment to enhance their personal legitimacy, despite that the techniques may not necessarily improve firm performance.

Suggested Citation

  • Lo, Chris K.Y. & Yeung, Andy C.L. & Edwin Cheng, T.C., 2011. "Meta-standards, financial performance and senior executive compensation in China: An institutional perspective," International Journal of Production Economics, Elsevier, vol. 129(1), pages 119-126, January.
    • Handle: RePEc:eee:proeco:v:129:y:2011:i:1:p:119-126
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    References listed on IDEAS

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    2. Castka, Pavel, 2018. "Modelling firms’ interventions in ISO 9001 certification: A configurational approach," International Journal of Production Economics, Elsevier, vol. 201(C), pages 163-172.
    3. Brandenburg, Marcus, 2016. "Supply chain efficiency, value creation and the economic crisis – An empirical assessment of the European automotive industry 2002–2010," International Journal of Production Economics, Elsevier, vol. 171(P3), pages 321-335.
    4. Liu, Feng & Rhim, Hosun & Park, Kwangtae & Xu, Jian & Lo, Chris K.Y., 2021. "HACCP certification in food industry: Trade-offs in product safety and firm performance," International Journal of Production Economics, Elsevier, vol. 231(C).
    5. Molina-Azorín, Jose F. & Tarí, Juan José & Pereira-Moliner, Jorge & López-Gamero, María D. & Pertusa-Ortega, Eva M., 2015. "The effects of quality and environmental management on competitive advantage: A mixed methods study in the hotel industry," Tourism Management, Elsevier, vol. 50(C), pages 41-54.
    6. Erik Hofmann & Yannick Sertori, 2020. "Financial Spillover Effects in Supply Chains: Do Customers and Suppliers Really Benefit?," Logistics, MDPI, vol. 4(1), pages 1-27, March.
    7. Juan José Tarí & Jorge Pereira-Moliner & Eva M. Pertusa-Ortega & María D. López-Gamero & José F. Molina-Azorín, 2017. "Does quality management improve performance or vice versa? Evidence from the hotel industry," Service Business, Springer;Pan-Pacific Business Association, vol. 11(1), pages 23-43, March.
    8. Zhao, Xiande & Li, Yina & Flynn, Barbara B., 2013. "The financial impact of product recall announcements in China," International Journal of Production Economics, Elsevier, vol. 142(1), pages 115-123.
    9. Daniel Prajogo & Pavel Castka & Cory Searcy, 2021. "Paymasters and Assurance Providers: Exploring Firms’ Discretion in Selecting Non-financial Auditors," Journal of Business Ethics, Springer, vol. 173(4), pages 795-811, November.
    10. Castka, Pavel & Prajogo, Daniel & Sohal, Amrik & Yeung, Andy C.L., 2015. "Understanding firms׳ selection of their ISO 9000 third-party certifiers," International Journal of Production Economics, Elsevier, vol. 162(C), pages 125-133.
    11. Yang, Yang & Jia, Fu & Chen, Lujie & Wang, Yichuan & Xiong, Yu, 2021. "Adoption timing of OHSAS 18001 and firm performance: An institutional theory perspective," International Journal of Production Economics, Elsevier, vol. 231(C).

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