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Process institutionalisation crowds out innovativeness? An empirical analysis on the relationships between ISO 9000 adoption and R%D expenditure

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  • L.M. Daphne Yiu
  • Hugo K.S. Lam
  • Andy C.L. Yeung

Abstract

Much research from an organisational perspective suggests that process certifications such as ISO 9000 constrain firms' explorative capability, crowding out research and development (R%D) activities. Yet, from an operations management (OM) perspective, process certifications like ISO 9000 should provide a well-established system, strengthening firms' capabilities for both exploration and exploitation. In this research, we examine the impact of ISO 9000 certifications on R%D expenditure of firms and investigate how such an impact is moderated by different operating environments. We find that firms actually increase their R%D expenditure after ISO 9000 certifications. Our results further indicate that ISO 9000-certified firms are more responsive to the changing operating environments for their R%D investments. ISO 9000 certifications reduce R%D expenses more swiftly under turbulence but expand more significantly with operational slack. Our research indicates that ISO 9000-certified firms seem to be more responsive to external environments in controlling their R%D expenditure.

Suggested Citation

  • L.M. Daphne Yiu & Hugo K.S. Lam & Andy C.L. Yeung, 2021. "Process institutionalisation crowds out innovativeness? An empirical analysis on the relationships between ISO 9000 adoption and R%D expenditure," International Journal of Productivity and Quality Management, Inderscience Enterprises Ltd, vol. 34(2), pages 241-265.
    • Handle: RePEc:ids:ijpqma:v:34:y:2021:i:2:p:241-265
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