CHAPTER ONE INTRODUCTION Background of the study
In the context of globalization, highly competitive markets, continuous technological advancement, and increasingly demanding customers, quality has become one of the most important elements in the strategies of making firms competitive (Ismyrlis & Moschidis, 2015). ISO has the most comprehensive scope in the improvement of firms’ performance through the promotion of quality (Evangelos & Psomas 2013). ISO family of standards are internationally recognized and designed to demonstrate the capability of a firm to control the processes and hence make the product or service acceptable; therefore, their implementation could be a source of competitive advantage, enhancing the company’s performance (Lamport, Seetana, Conhyedass & Sannassee, 2014).
Accordingly, all manufacturing firms seek to adopt and implement a set of quality practices that have been successful elsewhere and that will help them to identify changes in their environment and to respond proactively through continuous improvement so as to enhance performance (Fassoula, 2006). In Kenya, many manufacturing firms are rushing to be ISO certified, but whether this brings about better business performance is yet to be seen (Emeka et al.,2008).
Many African countries, including Kenya, have adopted ISO standards (Emeka et al., 2008 ; Raphael, 2010). Morris (2006) noted that the ISO certification is applicable to any type of organization, including the manufacturing sector, and it drives performance
improvement (Chow-Chua et al., 2003). According to Resource-Based View theory, a company’s performance is based on the resources and capabilities it holds in control which may become a source of competitive advantage (Martinez-Costa et al., 2008).
According to Riemann & Hertz, 2004, to create a competitive advantage, this is the degree to which a firm outperforms its competitors, performance measures, should be chosen for benchmarking. It is important to note those firm-specific resources that are valuable, rare, imperfectly inimitable and not substitutable (Barney, 2007). This is to say that performance is built on the resources that add value to firms and that are not homogeneously distributed across competing firms. In order to create a sustained competitive advantage, a firm must also possess imperfectly mobile resources which add to the firm’s performance (Brown et al., 2004).