Quality management and competitiveness: the diffusion of the ISO 9000 standards in Latin America and recommendations for government strategies

Quality will play an increasingly important role in the objectives for the social and economic development of the countries in Latin America. This document aims to demonstrate the importance of quality in national strategies for increased productivity and competitiveness. Governments in the region have increasingly established programmes that promote and support the diffusion of quality management techniques. This tendency indicates that the diffusion of quality management innovations is complicated by market failures but is desirable from a national point of view. This document may therefore be relevant for government agencies, international organizations, sectoral business organizations and institutes that are involved in policy design related to quality issues, as well as for individual companies interested in the implementation of quality management techniques. One of these techniques, the ISO 9000 standards for quality management systems, is the main topic of this document. The first chapter discusses how quality positively contributes to competitiveness at the national, sectoral and enterprise levels. Quality refers to the totality of features or characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Its implementation may be assigned as a management function. Basically, the Total Quality Management (TQM) philosophy and related quality management techniques have contributed to increased competitive performance through increased quality of products or services and cost reductions. An example of these quality management techniques is the ISO 9000 standards on quality management systems. Their scope, institutional infrastructure for certification and the costs and benefits of the implementation of ISO 9000 standards are discussed in chapter II. ISO 9000 standards function as a trade facilitator. They may improve business performance, and they establish a basic framework for further implementation of quality management practices. Consequently, the adoption of ISO 9000 standards is associated with enterprise competitiveness. Chapter III presents global and regional ISO 9000 diffusion data and describes some of the underlying factors that may have determined the diffusion pattern. This allows for a rudimentary estimation of the future diffusion of the ISO 9000 standards in Latin America. Chapter IV first identifies some of the underlying factors that have so far limited the diffusion of quality management techniques in Latin America. These obstacles provide a basis for the identification of market failures related to the diffusion of the ISO 9000 standards. The chapter then examines government programmes that aim to promote the enhanced diffusion of the ISO 9000 standards by correcting or adjusting these market failures. This document is concluded by an evaluation of different government-programme activities in Latin America.