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ISO 9000 and beyond: from a Hong Kongconstruction perspectiveMohan M. Kumaraswamy & Sunil M. DissanayakaPublished online: 21 Oct 2010.

To cite this article: Mohan M. Kumaraswamy & Sunil M. Dissanayaka (2000) ISO 9000 and beyond: froma Hong Kong construction perspective, Construction Management and Economics, 18:7, 783-796, DOI:10.1080/014461900433078

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Background and introduction

The ISO 9000 series of quality system standards were� rst issued in 1987, to provide an internationallyaccepted ‘common denominator’ of business quality(Rabbit and Bergh, 1994), by the InternationalStandards Organization which was itself founded in1946 to establish worldwide common standards formanufacturing, communication and trade (Nee, 1996).The ISO 9000 series underwent minor revisions in1994, while more substantial revisions are being tar-geted in 2000 (Tong, 1999). Therefore it is opportuneto take stock of the actual (versus expected) outcomesfrom the implementation of ISO 9000 in the 1990s.

The study reported upon in this paper focuses onthe particular outcomes observed about six years afterwidespread ISO 9000 certi� cation commenced in the

Hong Kong construction industry. A particularlypowerful client-led drive towards higher constructionquality in Hong Kong building and civil engineeringprojects followed from the discovery of some unsatis-factory construction practices in the 1980s (Coffey,1999). This client driven initiative in Hong Kongconstruction provides an interesting arena for asses-sing ISO 9000 effectiveness, plus a testing ground toconsider the growing arguments for moving beyond‘merely’ ISO 9000 certi� ed quality systems. Whileprivate sector clients have not usually insisted on ISO9000 certi� cation in Hong Kong, most ‘medium’ and‘large’ contractors obtain registration with principalpublic sector clients in any case, and thus profess theircerti� cation when tendering for private sector projects.

‘ISO 9000 sets the absolute minimum in require-ments for a quality management system (QMS) whichcan be independently audited’, but ‘has become an end in itself ’ and ‘many organisations have sought

Construction Management and Economics (2000) 18, 783–796

ISO 9000 and beyond: from a Hong Kongconstruction perspective

MOHAN M. KUMARASWAMY* AND SUNIL M. DISSANAYAKA

Department of Civil Engineering, The University of Hong Kong, Pokfulam Road, Hong Kong, PR China

Received 12 July 1999; accepted 28 January 2000

Client driven ‘pushes’ for ISO 9000 certi� cation in Hong Kong are observed to have overtaken anyspontaneous ‘pull factors’ (motivators) towards quality improvements ‘for their own sake’. For example, theneed for ISO 9000 certi� cation as a prerequisite for even being considered for public sector constructionworks appears to have distracted some organizations from a more comprehensive organization-speci� c devel-opment of their quality management systems. Both positive (bene� cial) and negative (detrimental) outcomes from ISO 9000 certi� cation, as observed from relevant previous studies, are summarized herein. Theseprovide a useful background against which to present perceptions derived from the current study in HongKong construction. The target groups were predominantly from consultants in the initial survey and all from contractors in the second and more comprehensive survey. The more signi� cant positive and negative outcomes from ISO 9000 certi� cation as derived from the two current surveys are identi� ed.Recommendations are made for realigned approaches to ISO 9000 certi� cation and for seamless integrationwith other quality management approaches such as TQM, as well as with other management subsystems,such as for productivity improvement and dispute minimization.

Keywords: Hong Kong, integration, ISO 9000, TQM, quality management

* Author for correspondence. e-mail: mohan@hkucc.hku.hk.

Construction Management and Economics

ISSN 0144–6193 print/ISSN 1466-433X online © 2000 Taylor & Francis Ltd

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registration as a result of pressure from their customers,or as a requirement for maintaining business. Whilegoing through the motions, many organizations havenot implemented their QMS with a sound under-standing of quality and management fundamentals’(Norman and Peterson, 1999). It appears worthwhileto test these general observations in Hong Kong, inparticular, given the public client driven initiatives inintroducing ISO 9000 to Hong Kong construction.

It was decided to assess the ISO 9000 certi� cationmotivators and perceived outcomes (both positive/bene� cial and negative/detrimental) in Hong Kongconstruction, using a survey instrument that had beendesigned with a view to cross-country comparisons) atthe Australian Centre for Construction Innovation ofthe University of New South Wales. The principalresults of the new surveys are summarized in this paper, preceded by a background of observations fromprevious surveys. This is followed by a scan of thepossibilities of integration with Total Quality Manage-ment (TQM) and other quality management routes,as well as integration with construction projectmanagement systems in general, for example incorpo-rating productivity enhancement, dispute minimizationand safety management systems.

Previous surveys

It is not surprising that a series of surveys have followedthe implementation of ISO 9000 certi� ed qualitysystems in many countries and for different industries/subsectors within such countries. Both industry-speci� c and cross-industry surveys have been launchedto compare the pros and cons of such certi� ed systems,with a view to a post-implementation appraisal of theprofessed net bene� ts. For example, Kumaraswamy(1996) described some surveys conducted in HongKong up to 1995. In this context it should be notedthat a quality policy was launched in May 1991 by thethen Works Branch (now Works Bureau, that overseesthe Government Works Departments charged with civil engineering works). This policy committed theseWorks Departments to achieving ISO certi� ed qualitylevels in speci� ed stages, for example for all approvedcontractors by 1 October 1996. Another large client,the Hong Kong Housing Authority set its own dead-lines for ISO 9000 certi� cation (by 1992 for all itsconcrete suppliers, by 31 March 1993 for its registeredcontractors and by 1997 for its consultants) while theConstruction Branch of the Authority itself obtainedISO 9000 certi� cation in 1993.

Both the longer term experiences of ISO 9000 certi-� ed organizations and the rapidly growing populationof such organizations have encouraged more surveys

in many countries. These yield useful observations fororganizations in search of ‘optimal’ quality manage-ment systems, which can draw from lessons on pastexperiences of similar organizations.

The need for further study was also reinforced byspeci� c observations, such as by Kam and Tang(1998), that Hong Kong contractors were forced todevelop their QMSs based on the ISO 9000 standardand that this certi� cation became a ‘work permit’.Furthermore, although many interim surveys havealready been conducted on the relative merits of ISO9000 certi� cation in construction organizations andmuch anecdotal evidence has accumulated since then,it was now considered valuable to launch a fresh surveyto test the above arguments, as well as to evaluate thepossibilities of greater bene� ts having � owed to HongKong construction organizations after a longer periodof ISO 9000 certi� cation – as was recently tested in a mix of industries in Singapore (Chow and Tan,1999).

For example, Abdel-Razek (1998) reported a surveyof 159 construction professionals and academics inEgypt, on the relative importance of factors needed toimprove construction quality. Improving design andpre-construction planning was ranked � rst, followed bydeveloping quality assurance and control systems(ranked second) while ‘encouraging ISO 9000’ wasranked only eighth out of sixteen factors considered.

In a more general (non-construction-speci� c) con-text a content analysis of 50 case studies of Australianbusinesses which had introduced quality assuranceand/or achieved ISO 9000 certi� cation was reportedby Beattie and Sohal (1999). Twenty-four percent ofthe companies did not identify any strategic bene� ts,while most of the others identi� ed only one strategicbene� t from implementing ISO 9000. Forty-twopercent perceived an increased market share, while 4% experienced an increased sales turnover. Only 4%claimed to have increased pro� tability, although 14%believed productivity had improved as a result of ISO 9000 certi� cation. Meanwhile, some operationalbene� ts were also perceived, for example in employeeskills, communications and customer service. On theother hand, more than half the organizations hadneeded certi� cation to tender for government work.Overall conclusions included the importance of (a)developing and communicating clear strategic reasonsfor ISO 9000 certi� cation and (b) using it as part ofan overall quality programme, including TQM forexample.

In a more speci� c context, Landin and Persson(1998) assessed two categories of specialist contractors(‘electrical and plumbing’ and ‘heating and ventilation’)in Sweden, in terms of the ISO 9000 standard and the ‘Crosby Quality Management Maturity Grid’. Legal

784 Kumaraswamy and Dissanayaka

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requirements for documented evidence of commitmentto quality ‘pushed’ companies to implement qualitysystems. This was seen also to improve long termcompetitiveness, while ISO 9000 provided the frame-work for developing such a quality system.

Tangible and intangible bene� ts from ISO 9000certi� cation were surveyed in a range of industries inSingapore (Chow and Tan, 1999), where it was seento be both an ‘admission ticket’ and to provide compet-itive advantage. However, perceived bene� ts were notfound to increase with the age of the certi� cation.Therefore, it was concluded that companies should notstop with ISO 9000 certi� cation, and that this shouldjust be a step in the quality journey.

Table 1 summarizes the main relevant � ndings fromsome other recent surveys on ISO 9000 certi� edcompanies (in general) in Hong Kong, and Table 2highlights such � ndings from Hong Kong constructionorganizations in particular.

Present surveys

Basis

The objectives of the present surveys in Hong Kongcrystallized from the needs identi� ed through the liter-ature review and previous surveys, as summarized inthe foregoing sections of this paper. Speci� cally, thepassage of about eight years since the start of the � rst‘push’ from construction clients towards ISO 9000certi� cation in Hong Kong warranted revisiting themotivators for, and outcomes from, such ISO 9000based quality systems in the Hong Kong constructionindustry.

Coincidentally, an invitation was received (by a co-author of this paper) to conduct a survey in Hong Kong, using a questionnaire developed at theAustralian Centre for Construction Innovation forcross-country comparisons, on these same aspects (i.e.motivators and outcomes). A four-point scale, ranging

ISO 9000 and beyond in Hong Kong 785

Table 1 Relevant extracts from some Hong Kong based surveys of ISO 9000 certi� ed companies (in general)

Reference Survey Main � ndings on motivators and/or outcomes

Lam (1997) Target group: Five major success factors were identi� ed (from ISO 9000 certi� ed companies among the 13 quality management success Sample size: 312 (randomly selected) factors initially considered): (1) implementation Responses: 32 (10%) (2) training (3) customer focus (4) alignment of

organization systems, and (5) communication.

Lau et al. (1999) Target group: (a) Motivators for implementing ISO 9000 based 23 major industries, including construction, systems: customer request (58%); gain telecommunication and utilities etc competitive advantage (42%).Sample size: 106 (b) Internal/external bene� ts after implementing Responses: 38 (36%) ISO 9000: helped to establish a formal quality

system (79%); improved quality image in themarket (66%).

(c) Disadvantages after implementing ISO 9000:lot of paper work (40%); implementing and maintaining ISO 9000 certi� cation was timeconsuming and costly (24%).

(d) Shortcomings of ISO 9000 Manual:lacked � exibility because of the need to address 150 written requirements (36%).

External reasons (e.g. customer demand and competitive advantage were noted as more important than internal reasons (e.g. improving quality and ef� ciency).

Chan and Lee Target group: 23 major industries Empirical evidence from 157 ISO 9000 certi� ed (1999) Sample Size: 2796 companies and 244 non-ISO 9000 certi� ed companies

Responses: 401 (14%) comprising: showed that the former demonstrated better 157 ISO 9000 certi� ed companies implementation of TQM practices addressed by the 158 Non-ISO 9000 certi� ed companies Malcolm Baldrige criteria.

More importantly, companies with ISO 9000 certi� cation achieved signi� cantly more competitive � nancial performance than those without ISO 9000

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from strongly agree (SA), through agree (A), anddisagree (D) to strongly disagree (SD), was designedto elicit subjective ratings/perceptions on the emer-gence (manifestation) of each outcome. Potentiallypositive (bene� cial) outcomes, and potentially negative(detrimental) outcomes were listed together whensoliciting these ratings from survey respondents.

Two surveys were conducted in Hong Kong, the � rstbeing a preliminary general survey of a mixed groupof respondents (although primarily from consultants),followed by a survey of contractors. The questionnaireformat was essentially the same, except that the second questionnaire was developed (a) to incorporatesix more potential positive outcomes and (b) to add a

786 Kumaraswamy and Dissanayaka

Table 2 Relevant extracts from some Hong Kong based surveys of ISO 9000 certi� ed contractors

Reference Survey Main � ndings on motivators and/or outcomes

Lee (1994) Target Group: Reasons for certi� cation of construction companies:ISO 9000 certi� ed companies Client-driven: 73%. (but only 1 service company and Sample size: 137 13% of manufacturing companies were customer-driven);Responses: 16 manufacturing companies, increased ef� ciency: 50% (but 74% of service 19 service companies and 26 construction companies and 69% of manufacturing companies companies (total 61, i.e. 45%) reported increased ef� ciencies).Survey was conducted in 1994

Kumaraswamy. Survey ‘A’ Target Group: Reasons for certi� cation:(1996) ISO 9000 certi� ed building and civil ful� l customers requirements (88% [agree]);

engineering companies increase reputation (56%);Sample size: 60 improve internal process (50%);Responses: 16 (27%) provide third party certi� cation (44%);Survey was conducted in 1995 follow competitors action (38%);

increase effectiveness/ef� ciency (38%);improve pro� tability (25%);open new markets (6%).

Kwok (1997) Target Group: (a) Main motivators to implement ISO 9000:contractors (including subcontractors) and government requirement (81% agree); customer consultants demand (72% agree); market advantage (64% agree).Sample Size: 186 (b) Bene� ts – internal operations: better documentation Responses: 53 (of which 77.3% were (85% agree); greater quality awareness (68% agree).contractors, the rest being consultants) (c) Bene� ts – external market: competitive advantage Response rate: 28.5% (60% agree).Survey was conducted in 1996 (d) Overall advantages/bene� ts of implementing

ISO 9000:helps to identify problem areas so that corrective action can be taken (81% agree); leads to continuousimprovements of work and performance (79% agree); helps to reduce rejects/rework cases (68% agree).

Au and Yu (1998) A study of a large infrastructure project in (3) Analysis of audit reports: 291 nonconformances were Hong Kong found in the 54 audit reports, the � rst four clauses, (3) Analysis of audit reports of the i.e. document and data control, inspection and contractors’ performance testing, control of quality records and process (3) 16 questionnaires were sent to quality control, accounted for 65% of the total number of engineers in the construction project and nonconformances10 responses were received (3) Questionnaire survey: unanimous agreement (of

quality engineers) that the current practice in judgingthe ‘milestone achievement’ for granting interim payments for the contractors was biased towards physical construction progress, rather than quality assurance issues.

Ahmed et al. (1998) Semi-structured survey of 5 major Quality assurance systems:contractors in February 1998 (1) have been ineffective in assessing quality of end

products and of achieving required culture change;(2) have diverted energy from process improvement to

checking and documentation; and(3) have failed to reach subcontractors and operatives.

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ISO 9000 and beyond in Hong Kong 787

Table 2 continued

Reference Survey Main � ndings on motivators and/or outcomes

Lee (1998) Target Group: Reasons for certi� cation Construction AllSample size: 640 ISO 9000 certi� ed To satisfy customer demand 39% 21%companies To stay in business 33% 29%Responses: 235 (86 manufacturing To improve management 10% 34%companies, 57 service companies and Others 18% 17%92 construction companies) Bene� ts of certi� cationResponse Rate: 37% Internal operationSurvey was conducted in August 1996 Better team spirit 60% 72%

Less staff con� ict 48% 58%Reduced wastage 55% 58%Increased ef� ciency 62% 68%Shorter lead time 26% 34%

Customer relationsImproved sales through new

customers 64% 62%Longer contracts with existing

customers 22% 25%Less control from the existing

customers 22% 30%Fewer complaints from existing

customers 58% 66%Kam and Tang Target group: 94% admitted mandatory government requirement was (1998) (1) 35 ISO 9000 certi� ed contractors most important reason for certi� cation; 17% quoted

(2) 10 consultants (5 certi� ed; demand from private developers; while 9% thought that 5 being certi� ed) quality management system could resolve problems and

reduce failure costs.ISO 9000 did not address all critical quality parameters.

Tang et al. (1998) Target group: 10 high ranking 30% thought that there was no obvious improvement construction contractors after implementation; 30% thought that performance

was better in document control but no effect was obvious on practical construction; 40% thought that having ISO accreditation was a practical issue, i.e. to be on the tender list.It appears that ISO 9000 has been treated as a ‘work permit’.

Lee (1999) Target group: Bene� ts of certi� cation Construction AllSample size: 1085 ISO 9000 certi� ed Clearer work procedure 96% 96%companies Improved quality of Responses: 114 manufacturing companies, product/service 85% 88%110 service companies and 159 construction Improved team spirit 63% 77%companies (total 383, i.e. 35% response Better control of sub contractors 68% 73%rate) Increased ef� ciency 58% 65%Survey was conducted from August to Less customer complaints 54% 62%November 1997 Findings indicate that while ISO 9000 certi� ed

companies can derive some degree of bene� t from certi� cation, a large proportion of these companies would now like to move beyond their existing status after certi� cation.

Ahmed et al. 100 interviews were conducted with senior The operations of quality assurance (QA) systems in (1999) management personnel of construction Hong Kong construction companies appeared to have

contractors engaged in civil and building improved, as evidenced by the declining number of works and certi� ed to ISO 9000 nonconformances raised (from 1996 to 1997).

However, the survey respondents commented that the QA systems are not effective in assuring quality, and that the limited exposure of the general QA consultants to the construction industry also led to QA system documents having little practical value.

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separate question that invited responses on potential‘motivators’ that in� uenced the choice of ISO 9000certi� cation. All respondents were also invited to add‘other’ outcomes and ‘motivators’ in addition to thosesuggested in the respective questions.

General survey of perceived outcomes (initial survey)

The target group comprised 42 (mostly) relativelyyoung construction industry personnel (mostly civilengineers) predominantly working for consultants (35),the others (7) being with contractors, who had chosento follow a 2.5 day ‘Continuing Professional Develop-ment (CPD) Course’ at the University of Hong Kongon ‘ISO 9000 for Design and Construction’ in lateOctober 1998. Of the 28 respondents, 14 were assistantengineers or graduate engineers, probably with a couple of years experience, while the others held moresenior positions such as ‘engineer’ (5), ‘assistant resi-dent engineers’ (2) and ‘quality coordinator’ (1). Therespondents rated their perceptions of ISO 9000 certi-� cation outcomes as indicated in the previous subsec-tion. During analysis, the positive outcomes were

grouped separately from the negative outcomes, and are presented in Table 3. Each set of outcomes was then ranked according to the greater perceived overall(collective) agreement of respondents (SA + A, thepercentages being added together) as shown.

‘Average ratings’ were computed, also from the 28 responses received, using an assumed four-pointnumerical scale (ranging from 1 = strongly agree (SA)to 4 = strongly disagree (SD)). It is observed that theranking would not have been very different had it beendone according to the ‘average ratings’. Thus averageratings were taken to be merely an additional indicator,since the numerical scale was assumed only for conve-nience during analysis.

Survey of outcomes perceived by contractors(second survey)

Six more potential positive outcomes were added tothe list, i.e. in addition to a new question on motiva-tors as indicated above. This expanded questionnairewas sent to a group of 125 contractors registered withthe Hong Kong Works Bureau and/or the Hong KongHousing Authority, in early 1999. A total of 33

788 Kumaraswamy and Dissanayaka

Table 3 Summarized perceptions of 28 Hong Kong construction industry personnel on ISO 9000 certi� cation outcomesa

Rank Feature SA + A SD + D SA A D SD AV.RAT.(%) (%) (%) (%) (%) (%)

Positive/bene� cial outcomes1 More systematic record keeping 96 4 36 61 4 0 1.682 Improved internal communication 89 11 14 75 11 0 1.963 Better risk management 89 11 11 78 11 0 2.004 Stronger customer focus 86 14 25 61 14 0 1.895 Greater client satisfaction 86 14 25 61 14 0 1.896 Enhanced competitiveness of

company 86 14 25 61 14 0 1.897 Continual improvement of

operation 82 18 11 71 18 0 2.078 Less rework or repair 75 25 4 71 25 0 2.219 Improved external communication 75 25 11 64 25 0 2.14

10 Less problems in defects liability period 68 32 4 64 29 4 2.32

11 Higher ef� ciency in operation 59 41 11 48 41 0 2.3212 Shorter project completion time 39 61 4 36 54 7 2.64

Negative/detrimental outcomes1 More paperwork 93 7 50 43 7 0 1.572 More time spent in management 89 11 29 61 11 0 1.823 Increased bureaucracy 88 13 13 75 13 0 2.004 Increased staff discontent 83 17 0 83 17 0 2.205 Higher overall project cost 71 29 11 61 29 0 2.186 Less � exibility in operation 61 39 14 46 39 0 2.257 Lower productivity 36 64 7 29 61 4 2.61

aAV.RAT., average rating on a scale from 1 to 4 (where 1 indicates ‘strongly agree’ and 4 indicates ‘strongly disagree’); SA, strongly agree;A, agree; D, disagree; and SD, strongly disagree.

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responses was received after follow-up (28% responserate). Table 4 indicates relevant aspects relating to thecomposition of the respondents.

The quality of the responses was considered to begood, given the additional comments received, theinterest shown in receiving feedback (from the results

summaries) and the indication that most of the res-pondents had themselves been involved personally withtheir site quality systems. Table 5 summarizes theresponses on the positive and negative outcomes,ranked according to their perceived signi� cance (totalpercentage of SA + A).

ISO 9000 and beyond in Hong Kong 789

Table 4 Basic background composition of respondents and their organizations in the second survey

Scope of worka Permanent staff Annual turnover (HK$) Position of respondents

Top level managers 9Residential/ commercial 19 , 50 8 , 200 million 8 (Senior) quality managers 14Civil infrastructure 20 50–150 10 200–800 million 11 Quality managers 5Other buildings 12 . 150 15 . 800 million 14 Senior managers 4

Unspeci� ed 1

aSome organizations (of the 33 in the sample) operate in more than one area.

Table 5 Summarized perceptions of 33 respondents from Hong Kong contractors on ISO 9000 certi� cation outcomes

Rank Feature SA + A SD + D SA (%) A (%) D (%) SD (%) AV.RAT.(%) (%)

Positive/bene� cial outcomes1 More systematic record keeping 97 3 42 55 3 0 1.612 Improved internal communication 91 9 9 82 6 3 2.033 Improvement in internal

performance appraisal systems 82 18 9 73 18 0 2.094 Enhanced competitiveness of

company 82 18 3 79 18 0 2.155 Continual improvement of

operation 81 19 13 68 16 3 2.106 Less rework or repair 79 21 15 64 21 0 2.067 Greater client satisfaction 76 24 9 67 24 0 2.158 Having a valuable marketing tool 75 25 6 69 25 0 2.199 Client perceives higher quality of

work done 70 30 0 70 27 3 2.3310 Stronger customer focus 67 33 6 61 33 0 2.2711 Higher ef� ciency in operation 64 36 9 55 33 3 2.3012 Less problems in defects liability

period 61 39 15 45 36 3 2.2713 Better risk management 61 39 6 55 39 0 2.3614 Better access to domestic markets 58 42 9 48 42 0 2.3315 Improved external communication 52 48 9 42 45 3 2.4216 Improved supplier relations 45 55 0 45 52 3 2.5817 Better access to overseas markets 44 56 6 38 50 6 2.5618 Shorter project completion time 13 87 0 13 65 23 3.10

Negative/detrimental outcomes1 More paperwork 100 0 58 42 0 0 1.422 More time spent in management 85 15 9 76 15 0 2.063 Increased bureaucracy 63 38 16 47 34 3 2.254 Higher overall project cost 58 42 12 45 36 6 2.365 Less � exibility in operation 42 58 3 39 55 3 2.586 Increased staff discontent 35 65 3 32 61 3 2.657 Lower productivity 13 88 0 13 78 9 2.97

AV.RAT., average rating on a scale from 1 to 4 (where 1 indicates ‘strongly agree’ and 4 indicates ‘strongly disagree’); SA, strongly agree;A, agree; D, disagree; SD, strongly disagree.

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Comparing ranking results from the two surveys

The rankings of the perceived signi� cance of potentialnegative outcomes in the above two surveys werecompared using the rank agreement/disagreement com-putation formulae described by Okpala and Aniekwu(1988) and summarized in the Appendix. The percent-age agreement between the rankings of the 28-member(mostly consultant) general group and the 33-membercontractor group on the negative outcomes was foundto be very high at 90%. Any possible agreementbetween rankings of the positive outcomes was notassessed, since there were six additional positive out-comes incorporated in the second survey.

Proposing a thumb-rule for assessing the signi� -cance levels of perceived outcomes

Table 5 includes columns that combine the percentagesof respondents who strongly agree and agree (SA + A),and combines (separately) those who strongly disagreeand disagree (SD + D). These columns were used forranking the outcomes as above, and for an initial quickball-park (� rst-order) comparison of the overall per-ceived signi� cance of these outcomes. A basic (orcrude) thumb-rule was � rst formulated and later tested for this purpose, i.e. of identifying strikingly/strongly positive outcomes (and conversely stronglynegative outcomes). Essentially, it � rst selected out-comes where the percentage of overall agreement (totalof SA + A) was more than double the percentage ofoverall disagreement (total of SD + D). This led to the

selection of (a) a total of ten potentially ‘signi� cant’positive outcomes (comprising the � rst ten as ranked inthe upper part of Table 5) and (b) two negative out-comes (the � rst two outcomes as ranked in the lowerpart of Table 5).

Conversely, the same thumb-rule could point to out-comes that appeared signi� cantly ‘opposite’ to thoseinitially expected, i.e. where the majority of respondentsdisagreed. This could be approximated where the per-centage of overall disagreement (total of SD + D) wasmore than double the percentage of overall agreement(total of SA + A). This applied to the ‘shorter projectcompletion time’ outcome ranked last in the upper partof Table 5; and also the ‘low productivity’ outcome,ranked last in the lower part of Table 5.

Figure 1 portrays the foregoing comparisons graph-ically, indicating all outcomes, including those wherethe combined agreement is more than double (or lessthan half) the combined disagreement; and those wherethere appear to be some overall uncertainty (no clearcollective perceptions), i.e. where the combined agree-ment is relatively closer to the combined disagreement.

Using cluster analysis to test the proposedthumb-rule for assessing signi� cance levels

Clearly it is important to distinguish between strongly positive and negative outcomes from ISO9000 certi� cation system implementations. However,it was questionable whether a more rigorous route toidentifying strongly positive (and negative) outcomes

790 Kumaraswamy and Dissanayaka

Figure 1 Contractors’ perceptions of the emergence of various outcomes following from ISO 9000 certi� cation.

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was needed (i.e. to proceed beyond the � rst-orderdistinctions derived from the proposed thumb-rule).Therefore cluster analysis was applied to the aboveseries of outcomes (derived from the proposed thumb-rule), in order to test the validity of this assumed basicthumb-rule. The objective of cluster analysis is topartition a set of objects into groups or clusters in sucha way that the pro� les of objects in the same cluster are very similar (homogeneous), whereas the pro� lesof objects in different clusters are quite distinct(Jobson, 1992).

The most common approach to cluster analysis isthe hierarchical clustering method. It proceeds in steps,yielding a nested arrangement of objects in groups. Thesequence of steps in this clustering process can beconveniently visualized using a tree diagram hierarchy(dendrogram), as in Figure 2 that was produced at theconclusion of the analysis in this case, using the SPSSstatistical software package.

When progressing through a hierarchical clusteringprocess, a sequence of cluster solutions is obtained withan ideal solution appearing for each possible numberof clusters from n to 1. The simplest approach to eval-uating cluster choice uses a ‘group proximity measure’for the two groups (clusters) connected together ateach step. Such measurement of proximity betweentwo groups may be approached in many ways, suchas: between-groups linkage, within-groups linkage,nearest neighbour, furthest neighbour, centroid clus-tering, median clustering, and Ward’s method (Jobson,1992).

The ‘between-groups linkage’ method was used inthis study for the measurement of proximity betweenany two groups (clusters). Two variables, i.e. percent-age of strong agreement/agreement (SA + A) and

percentage of strong disagreement/disagreement (SD +D) of positive outcomes (as shown in Table 5) wereused for cluster analysis and the number of clustergroups was held at 3; i.e. where the group proximitymeasure (termed ‘relative similarity’ here) was about 7.A more detailed description of the use of such a ‘rela-tive similarity’ measure for cluster analysis (in anotherconstruction scenario) was provided by Holt (1996).

Figure 2 presents the resulting dendrogram thatdemonstrates the clustering observed within the posi-tive (bene� cial) outcomes as derived from the surveyof contractors in this study. If the number of clustersis reduced to two by taking another step in this process,the ‘relative similarity’ (group proximity measure)increases to about 25, while also unrealistically parti-tioning the 18 positive outcomes into two groups of17 and 1. The previous choice of three cluster groupswas thus justi� ed.

The above cluster analysis results were nextcompared with the previously described thumb-rule(that had been used to classify the positive outcomes)as follows:

Cluster 1—percentage of overall agreement (SA + A)is more than double the percentage of overalldisagreement (SD + D);

Cluster 2—percentage of overall agreement is lessthan double the percentage of overall disagree-ment, or vice versa; and

Cluster 3—percentage of overall disagreement ismore than double the percentage of overallagreement.

Table 6 summarizes the cluster groups for positiveoutcomes, as identi� ed through both the clusteranalysis and this thumb-rule, and indicates the clus-tering of ‘positive’ outcomes into three groups by both(separately) the cluster analysis and the thumb-rule.The results are seen to be quite similar. Only twooutcomes are classi� ed differently by the two differentapproaches, i.e. ‘client perceives higher quality of work done’ and ‘stronger customer focus’ – which thecluster analysis found to be less signi� cant than thethumb-rule. However, these differences are marginalcompared with the general agreement in classi� cation.Thus it appears that the thumb-rule method can beused as a short-cut/� rst approximation to identify thesigni� cant outcomes, even in the absence of a (statis-tical) cluster analysis.

Second, the ‘positive’ outcomes in cluster group 1 can be considered to be signi� cantly supported, while those in cluster group 3 (just one in this case)may be considered to be signi� cantly rejected by the survey respondents. Conversely, no de� nitiveconclusion may be reached as regards those outcomesin cluster group 2. A similar exercise can be conducted

ISO 9000 and beyond in Hong Kong 791

Figure 2 Dendrogram demostrating the clustering withinthe positive outcomes in this survey. The rank is as presentedin the upper part of Table 5 and in Table 6.

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for the ‘negative’ outcomes, but was not pursued inview of the smaller number (7).

‘Motivators’ that drove ISO 9000 certi� cation

The second survey (i.e. speci� cally of contractors) alsoelicited perceptions on the motivators that pushed/pulled contractors to pursue ISO 9000 certi� cation.The aggregation of the responses showed that mostwere client/market/external factor driven, for example:‘to qualify for public projects’ (ranked 1st with 88%);‘to meet customer expectations’ (2nd with 64%); and‘to gain competitive advantage’ (4th with 48%). Theinternal/self-improvement factors appeared secondary:for example ‘to improve the quality of work done’(ranked 3rd with 52%); ‘to increase ef� ciency andproductivity in all areas of operation’ (5th with 45%);and ‘as part of a larger improvement strategy’ (6th with42%). Three other potential motivators (as listed inthe questionnaire) were considered to be even lessimportant.

Beyond ISO 9000

Principal relevant results from the presentsurveys

Greater attention is warranted to the second survey,given the more experienced respondents, increasednumber of questions and deeper analysis. However, the

high (90%) correlation observed between the two setsof collective perceptions of the negative outcomes fromISO 9000 certi� cation indicated a potential similarityof overall experiences. For example, there was a consis-tent perception of more paperwork and more timespent in management and bureaucracy.

Even with respect to the positive outcomes, ‘moresystematic record keeping’ and ‘improved internalcommunication’ were perceived to be particularlysigni� cant by both samples. The contractors (in thesecond sample) also valued ‘improvements in internalperformance appraisal systems’, ‘enhanced competi-tiveness’, ‘continual improvement’ and ‘less rework orrepair’.

Consolidating observations from previous andpresent surveys

It appears, for example from the higher ranking posi-tive outcomes as perceived from the present surveys,that the outcomes achieved are somewhat differentfrom those targeted originally in improving construc-tion quality. The client-driven crusade towards ISO9000 certi� cation in Hong Kong conceivably couldhave contributed to such distortions; i.e. with ISO9000 certi� cation being seen as an end in itself, ratherthan a means to an improved quality system. However,it is now increasingly recognized (internationally) asjust the � rst step in the ‘quality journey’ (Norman andPeterson, 1999).

792 Kumaraswamy and Dissanayaka

Table 6 Cluster groups of positive outcomes derived from the survey of contractors

Ranking Positive outcomes % % Cluster group Cluster groupas in top SA + A SD + D allocation allocationof Table (by thumb- (by cluster 5 rule) analysis)

1 More systematic record keeping 97 3 1 12 Improved internal communication 91 9 1 13 Improvements in internal performance

appraisal systems 82 18 1 14 Enhanced competitiveness of company 82 18 1 15 Continual improvement of operation 81 19 1 16 Less rework or repair 79 21 1 17 Greater client satisfaction 76 24 1 18 Having a valuable marketing tool 75 25 1 19 Client perceives higher quality of work done 70 30 1 2

10 Stronger customer focus 67 33 1 211 Higher ef� ciency in operation 64 36 2 212 Less problems in defects liability period 61 39 2 213 Better risk management 61 39 2 214 Better access to domestic markets 58 42 2 215 Improved external communication 52 48 2 216 Improved supplier relations 45 55 2 217 Better access to overseas markets 44 56 2 218 Shorter project completion time 13 87 3 3

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Interesting questions arise from the above proposi-tion. For example: (a) will this recognition facilitatemore ‘intelligent’ and sustainable ISO 9000 basedsystems that are designed for the greater good (and thelonger term) of the organization, rather than just forthe certi� cate?; or indeed (b) is ISO 9000 certi� cationa step in the wrong direction (rather than the � rst stepin the right direction), as questioned by Ahmed et al.(1998), Shammas-Toma et al. (1998) and Lau et al.(1999). Ahmed et al. advocated an independent totalquality management (TQM) approach instead,pointing out that quality assurance had not providedthe necessary change of culture, but had diverted ener-gies from customer needs satisfaction and processimprovement to checks and documentation, forexample.

The latter proposition is in turn brought into ques-tion by observations such as those by Chan and Lee(1999), who found that the performance of ISO 9000certi� ed companies indicated better implementation ofTQM priorities, when compared with non-ISO 9000certi� ed companies. Lau et al. (1999) also called formore research into Hong Kong companies and theirattitudes, to ascertain whether TQM programmes arebeing coordinated with ISO 9000 certi� cation, whileadvocating the spirit (rather than the letter) of qualityimprovements that should � ow from certi� cation. Theobservations gleaned from the past and present surveyspoint to the value of such coordinated efforts with ahigher and longer term purpose than mere certi� ca-tion.

Total quality management

Ingle and Jacobsen (1999) quoted an observation byT.C. Powell that ‘no other management concept orpractice . . . has ever received so much practitionerattention, with so little academic study as TQM’. Theyidenti� ed four approaches to TQM, namely strategic,philosophical, random adoption and continuousimprovement, but found that whatever the initial mainapproach ‘continuous improvement’ was a common‘subsidiary approach’. Going further, Ahmed et al.(1998) refers to exhortations for ‘a revolutionaryculture change’ that go beyond mere conformance toa set of standards.

TQM itself aims to achieve customer satisfactionthrough continuous improvement and teamwork. It measures success through customer satisfactionrather than just certi� cation/registration; it emphasizesprocess improvements rather than mere controls andreplicability; it provides more � exibility by removingbarriers to improvements; and it encourages employeeparticipation and teamwork in the pursuit of suchprocess improvements and customer satisfaction. The

above aims and approaches to TQM con� rm the advis-ability of integrating ISO 9000 initiatives into a largerbut more rewarding TQM journey in the � rst instance.

Beyond TQM

Performance assessments could use the MalcolmBaldridge National Quality Award Criteria (Chan andLee, 1999), the Crosby Quality Management MaturityGrid (Landin and Persson, 1998) or organizationspeci� c systems such as the comprehensivePerformance Assessment Scoring System (PASS)developed by the Hong Kong Housing Authority fordetailed evaluation of the various inputs and outputsof each contractor on its public housing projects. Betterperforming contractors (with higher PASS scores) arerewarded with more tendering opportunities, whilePASS is seen as a ‘complementary checking system forassurance of the various quality aspects of construc-tion works’ (Coffey, 1999), the contractors alreadyhaving been ISO 9000 certi� ed.

Other developments stem from the need for a moreholistic view of quality, for example integrating productquality, with environmental quality; using quality func-tion deployment (Akao, 1999); and also revampingmanagement systems to integrate quality, environ-mental and safety management components (Ng,1999). The importance of human factors, relationshipsand networks in such systems was recognized byZineldin (1999), who proposed an integration of TQMwith TRM (total relationship management). TRMfocuses on integrating all internal and external activi-ties within and between organizations.

Human factors such as motivation, empowermentand commitment, and relationship variables such asdegree of trust and the relative strengths of interorga-nizational and intraorganizational networks all need tobe mobilized for effective quality management. Themobilization of such factors requires further study andcareful integration. However, some initiatives in thisdirection are already discernible. For example, TQS(total quality service) has been tried particularly in thehospitality industry, by targeting service excellencethrough recognition of workplace social structures,shared values and empowerment (Dewald and Sutton,1999).

Other proposed developments (‘off-shoots’)emanating from TQM roots include: (a) TQDM (totalquality data management), involving a four-stage iterative cycle of de� ne–measure–analyse–improve(adapted from the ‘plan–do–check–act’ ‘Deming’quality management cycle), for improving informationquality (IQ) and knowledge management in organiza-tions, in this information-driven era (Huang et al.,1999); (b) TQC (total quality in construction), which

ISO 9000 and beyond in Hong Kong 793

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was an industry-speci� c adaptation of TQM developedby the TQM Task Force of the European ConstructionInstitute (ECI), along with a ‘Measurement Matrix and Guidelines for Improvement’ (ECI, 1993); (c)moves to integrate TQM with BPR (business processre-engineering), for example as reported in a case studyin Ireland (Hill and Collins, 1999); (d) integratingquality management with productivity improvementapproaches, as for example studied by Lee et al. (1999)in a Hong Kong industry survey; and (e) integratingTQM with re-engineered procurement approaches, forexample using a ‘joint management team’ for closecoordination of design and construction functions inbuilding services (Lam, 1999).

It is evident that a ‘quality culture’ needs to becreated in moving beyond mere ISO 9000 certi� ca-tion, in order to foster favourable conditions forsustained quality improvements. Although this paperdoes not focus on tactical solutions, possible strategiesto shift existing mind-sets are mapped in the following‘concluding observations’. A paradigm shift is in factcalled for, in order to integrate re-engineered qualitymanagement subsystems with other critical manage-ment subsystems (such as productivity) in order toderive synergies, rather than cause con� icts.

Concluding observations

The foregoing section reinforces the call to movebeyond ISO 9000 while making use of the bene� tsderived from the systems set up for certi� cation. Also,it suggests the needs: (a) to reposition the push/pullfactors presently motivating ISO 9000 certi� cation andto align them with the wider and longer term totalquality improvement vision; (b) to supplement thistargeted total quality culture with construction industryspeci� c developments that move beyond TQM itself,for example to incorporate critical human and organi-zational factors; and (c) to integrate closely otherperformance enhancement initiatives with qualitymanagement developments.

The usefulness of construction-speci� c guidelines forISO 9000 certi� cation has already been consideredfavourably, for example: (a) by the Hong KongConstruction Association, which initially issued such aset of guidelines based on the 1987 ISO 9000 seriesin 1992 (Kumaraswamy, 1996); and (b) by Kam andTang (1998) who preferred ‘additional guidance notesto assist contractors to better interpret the ISO 9000standard’, instead of the construction-speci� c standardthat some of their engineering consultant group surveyrespondents had considered as a possible alternative.This appears to be a promising path to pursue, i.e. todevelop a set of hardcore guidelines that would enable

construction organizations to orient their intended orexisting ISO 9000 certi� ed systems towards moreindustry-speci� c and organization-speci� c needs.

Khan and Ha� z (1999) demonstrated the potentialuse of an expert system (a computerized advisorysystem based on codi� ed knowledge collected fromrelevant experts) for ISO 9000 implementation byidentifying gaps between ISO 9000 prerequisites andthe current organizational environment. While this wasdemonstrated in the context of organizations ingeneral, it is worth exploring the feasibility of aconstruction-speci� c expert system that would incor-porate the previously proposed guidelines. Theseguidelines could be oriented towards addressing themore signi� cant negative outcomes identi� ed in the‘present surveys’ reported in this paper, for exampleincorporating strategies that would rationalize thepresently excessive paperwork. The fact that a 90%agreement was discerned (in the ranking of negativeoutcomes) between the two survey groups in this study,indicates a commonality in the collective industryperceptions of such items that need attention. Also theguidelines could be designed to enhance and synergizethe more signi� cant positive outcomes identi� ed fromthe present surveys; and also to seamlessly integratethe quality management subsystem with productivityimprovement, safety, dispute management and othersuch managerial subsystems. This should minimizeduplicated efforts and paperwork, as well as proceduralclashes, resource con� icts and management over-load; while proactively facilitating potential synergiesbetween the various managerial subsystems. Althoughalmost obvious, this is an often neglected or forgottenfact. Frantic attempts to independently develop onesupposedly critical subsystem are then sti� ed bycon� icts with the others. Holistic development of allsubsystems is the key to improving performance, andhence the need to incorporate the proposed movebeyond ISO 9000 in a more comprehensive framework.

It should be noted in conclusion that the reportedstudy is seen to be a step forward towards formulatinga portfolio of signi� cant ‘positive’ and ‘negative’outcomes that may probably follow from ISO 9000certi� cation of construction contractors. This stepprovided a consolidated overview of Hong Kongconstruction industry perceptions on the relative signi-� cance of the commonly experienced positive andnegative impacts on performance. However, anotherstep – incorporating actual performance measurementsbefore and after ISO 9000 certi� cation – would beuseful before con� rming the validity of (or adjusting)the collective perceptions summarized in this paper. The inherent dif� culties in designing effective measure-ment instruments in these multivariate scenarios and evaluating such before and after states (while also

794 Kumaraswamy and Dissanayaka

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eliminating distorting ‘noise’ effects arising from themany intervening variables) suggests the need for aspeci� c set of longitudinal case studies (of organiza-tions over a period of time). These could be incorpo-rated in an interesting, but challenging research projectthat would follow from the present study. The follow-up study could of course be more focused now, forexample by initially evaluating the apparently moresigni� cant outcomes as identi� ed in the present study.

Acknowledgements

The two ‘present surveys’ reported in this paper were carried out on the basis of the questionnairedeveloped by Associate Professor Marton Marosszekyand Dr. Khalid Karim of the Australian Centre forConstruction Innovation, University of New SouthWales. Their questionnaire design and invitation to useit in Hong Kong are gratefully acknowledged.

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Appendix

Okpala and Aniekwu (1988) used a rank agreementfactor (RAF) in order to evaluate the agreement inranking between different groups of project partici-pants. A RAF of zero indicates perfect agreementbetween the two groups, whereas a higher value ofRAF gives a lesser agreement. The ‘percentagedisagreement’ and the ‘percentage agreement’ couldalso be obtained from the RAFs.

For any two groups, let the rank of the ith items inGroup 1 be Ri1 and in Group 2 be Ri2, let N be thenumber of items and j = N – i + 1. The ‘RankAgreement Factor’ is then de� ned as:

æ N

Si=1

|Ri1 – Ri2|ö

ç ÷è ø

RAF = ———————N

with a maximum RAF:

æ N

Si=1

|Ri1 – Rj2|ö

ç ÷è ø

RAFmax = ———————N

The percentage disagreement (PD) is de� ned as:

N

Si=1

(|Ri1 – Ri2|)

PD = ——————– 3 100N

Si=1

(|Ri1 – Rj2|)

The percentage agreement (PA) is then given as:

PA = 100 – PD

796 Kumaraswamy and Dissanayaka

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