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International Journal of Project Management 29 (2011) 1044 1056 www.elsevier.com/locate/ijproman

ISO 9000 certification and construction project performance: The Malaysian experience
Sabariyah Din a,1 , Zahidy Abd-Hamid a,1 , David James Bryde b,
a

Business and Advanced Technology Centre (BATC), University of Technology, Malaysia, International Campus, Kuala Lumpur, Malaysia b School of the Built Environment, Faculty of Technology and Environment, Liverpool John Moore University, Liverpool, L3 5UZ, UK Received 22 February 2010; received in revised form 31 October 2010; accepted 9 November 2010

Abstract Purpose: This paper explores the relationship between an ISO 9000 certified quality management system (QMS) and elements of performance in construction project environments. Design/methodology/approach: A survey based approach is used to collect data from project managers working in the Malaysian construction sector in both ISO 9000 certified and non-certified organisations. Three elements of performance are explored: project management (PM) practices, financial management (FM) practices and Project Success. The Project Management Performance Assessment model (PMPA) (Bryde, 2003) is used as the framework for assessing PM Practices. 336 completed questionnaires are analysed, with a group of 73 being from ISO 9000 certified companies (a response rate of 48.3%) and a group of 262 being from non-certified companies (response rate = 32.6%). MANOVA are used to explore differences in levels of performance between the two groups. Findings: Overall there is significance difference in mean scores at the 5% level in respect of each of the PM and FM Practice elements of performance, indicating that ISO 9000 certified companies have enhanced levels of performance in their project environments compared to those in non-certified companies. The two exceptions are the PM Practice related to establishing partnerships and managing resources and the FM Practice related to allowing for inflation and price escalations. The results also indicate that ISO 9000 certification has a positive moderating effect on the casual relationship between PM Practices and Project Success. Based on the survey results a Project Management Performance Assessment for Construction (PMPAC) model is developed, which extends the PMPA to include performance enablers linked to financial management activities. Research limitations/implications: The survey focuses on the construction sector in Malaysia and further work is required to see if the findings are applicable to other countries and also to other business sectors beyond the construction sector. Originality/value: The research reported in this paper is original in that prior research into the link of ISO 9000 certification and dimensions of organizational performance has not explicitly focused on project environments. The research findings provide evidence that those seeking to enhance their project performance could gain benefits from developing a QMS and seeking ISO 9000 accreditation. However the finding also indicate that an approach to performance management based solely on establishing a certified QMS may have its limitations in terms of establishing processes for managing the relationships on a project through partnership approaches and in dealing with uncertainty in the external environment, such as price fluctuations. The PMPAC model presented in this paper provides a framework for those working in construction project environments to ensure their project management systems incorporate the key activities that enable better performance. 2010 Elsevier Ltd. and IPMA. All rights reserved.
Keywords: Project performance; Project success; ISO 9000; Quality management systems; Construction sector; Malaysia

1. Introduction
Corresponding author. Tel.: +44 151 231 2892. E-mail addresses: saba@ic.utm.my (S. Din), ir.zahidy@gmail.com (Z. Abd-Hamid), D.J.Bryde@ljmu.ac.uk (D.J. Bryde). 1 Tel.: +60 3 2691 4020.

Since its inception in 1987 the ISO 9000 series of standards has been adopted worldwide across all types of business sectors as a means of certifying a quality management system (QMS). By the

0263-7863/$ - see front matter 2010 Elsevier Ltd. and IPMA. All rights reserved. doi:10.1016/j.ijproman.2010.11.001

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end of 2008 there were 982,832 ISO 9000 certified companies worldwide, representing an increase of 31,346 (3%) since 2007 (The ISO Survey, 2010). This reflects an annual growth rate of 20% (19952006) in the number registered with the International Standards Organisation (Martinez-Costa et al., 2009). The certification movement has its origins in manufacturing and is predicated on the theory that the development and application of standards in the case of ISO 9000 linked to a QMS, enhances organizational development and contributes to performance (Schlickman, 2003, p.12). So quality products are produced through assuring the quality of the manufacturing process. Whilst having its roots in manufacturing the ISO 9000 standard is now adopted by many business sectors, including service industries. One such sector is construction. In the 1990s the sector was criticized for poor performance, with issues identified including ineffective tendering-based procurement methods and a lack of partnering-based approaches (Black et al., 2000), lack of project management experience, skills and knowledge (Lim and Mohamed, 2000), organization fragmentation (Berggen et al., 2001), and poor change and communication management (Yates and Eskander, 2002). In light of this perception of poor performance, Egan, in his landmark report into the state of the industry and the way forward, challenged construction to learn from manufacturing. He stated that 5 years hence the industry should deliver its products to its customers in the same way as the best customer-led manufacturing and service industries (Egan, 1998: p.40). Although there were some dissenting voices, who argued that construction was too different to manufacturing to be a perfect exemplar of good practice i.e. Kazaz and Birgonul (2005), the common response of the sector was to take up Egan's challenge. As such, management techniques initially developed in the manufacturing sector, such as just-in-time and lean production, have in recent years been adopted by construction companies. As part of this adoption QMSs were effectively applied to construction project environments, with desirable outcomes achieved from such application (Serpell, 1999). It is this desire to adopt practices from manufacturing that has fuelled a worldwide drive, which in some places is continuing apace, for construction companies to have ISO 9000 certification. One country in which the drive has gained great momentum in the last few years is Malaysia. The Malaysian construction sector makes a significant contribution to the nation's economy, with the GDP for the industry showing an increase from RM6.964 billion in 2000 to RM7.133 billion in 2005 (CIDB, 2007). It is now compulsory for all construction companies to be registered with the Construction Industry Development Board Malaysia (CIDB) before undertaking their business operations in Malaysia. New regulations required Grade G7 contractors, the highest grade, to be certified with the ISO 9000 QMS as a compulsory condition of registration by January 1st, 2009. Failure resulted in being downgraded, which adversely impacts on the ability to do business. The Malaysian experience mirrors that of other countries. For example in Australia, Hong Kong and Singapore regulations were imposed requiring construction companies to be ISO certified in order to qualify to bid for public sector building projects (Pheng and Shina, 2000). In Malaysia the perceived

benefits of having ISO 9000 specifically relate to providing enhanced functionality and being better able to satisfy project clients (Ali and Rahmat, 2010). Table 1 provides a summary of studies into the link between ISO 9000 certification and elements of performance. The studies have tended to focus on two broad elements of performance: financial and organizational. Studies interested in financial performance use secondary data sources, such as company annual accounts and national databases that report various dimensions of financial performance i.e. earnings before taxes and return on assets (see, for example, MartinezCosta and Martinez-Lorenta, 2007). Organizational performance is typically defined as a multi-dimensional construct and data are collected mainly using perceptual-based measures. An example in Table 1 is Martinez-Costa et al. (2009), who surveyed employees to obtain opinions on cost, delivery, timeliness, flexibility and quality of production, and customer and employee satisfaction. The surveys cover all geographical regions, whilst the majority are not industry-specific. None of the surveys focus exclusively on the link between ISO 9000 certification and project performance. Karim et al. (2005) investigate some perceived project-related benefits but this is part of a wider study of various organizational benefits and does not involve statistical analysis of differences in performance between ISO 9000 certified and non-certified companies. 4 of the studies focus on the construction sector, yet these are relatively small in scale: Ofori and Gang (2001) n = 33, Dissanayaka et al. (2001) n = 33, Karim et al. (2005) n = 67 and Chini and Valdez (2003) n = 54. Furthermore none of these surveys undertake statistical analysis to compare levels of performance between ISO 9000 certified and non-certified companies and none consider in-depth the impact of a QMS on a range of project performance dimensions. The detail in Table 1 confirms the view that there has been limited large-scale research focused on analyzing the link a certified QMS and levels of performance in construction project environments (Barad and Raz, 2000) and that the role of certified QMSs in the construction industry is still an under-researched area (Turk, 2006). Given that a gap in the extant literature exists, coupled with the current pressures on construction companies in countries like Malaysia to become certified, there is a timely need for research in this area. Such research should focus not only on investigating if a link exists but also on a more finely grained examination of how any links are constructed. Therefore the objective of the research, which is reported in this paper, is to understand if and how ISO 9000 certification impacts on project performance. The remainder of this paper is structured as follows: firstly, the conceptual framework for the research is introduced; then, the research method is detailed; this is followed by a presentation and discussion of the research findings; limitations and areas for further study are then outlined; and lastly, some conclusions are drawn. 2. Conceptual framework In terms of examining the effects of ISO 9000 certification on project performance there are two broad elements to consider:

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Table 1 Studies of the association between ISO 9000 certification and elements of performance (2000 onwards). Author Element of performance Financial Financial Organizational Organizational Organizational Financial Organizational Organizational Financial Financial Organizational Financial Financial Financial Method Survey with secondary data 1 dimension of performance Survey with secondary data 5 dimensions of performance Survey with primary data 2 dimensions of performance Survey of primary data 2 dimensions of performance Survey with primary data 5 dimensions of performance Survey with secondary data 2 dimensions of performance over 5 year period Survey with primary data 3 dimensions of performance Survey with primary data 2 dimensions of performance Survey of secondary data 2 dimensions of performance over 4 year period Survey with secondary data 5 dimensions of performance Survey with primary data 4 dimensions of performance Survey with secondary data 4 dimensions of performance Secondary data from 1989 to 1993 & 1996 to 1999 6 dimensions of performance Survey with secondary data over 4 years 2 years pre and 2 years post ISO 5 dimensions of performance Survey with primary data 2 dimensions of performance Survey with secondary data 3 dimensions of performance Survey with secondary data Sample Analysis procedure Regression analysis Wilcoxon signed rank test Descriptive statistics Descriptive statistics T-test T-test Krustal-Wallis & Mann Whitney Descriptive statistics ANOVA & regression analysis T-test & factor analysis Multivariate analysis Regression analysis MannWhitney & KrustalWalis ANOVA Region Industry specific? No No Yes construction Yes construction No No Association? Yes No

Hversj (2000) Lima et al. (2000) Dissanayaka et al. (2001) Ofori and Gang (2001) Singels et al. (2001) Heras et al. (2002) Escanciano et al. (2002) Chini and Valdez (2003) Pinar et al. (2003) Chow-Chua et al. (2003) Terziovski et al. (2003) Naser et al. (2004) Dimara et al. (2004) Arbuckle (2004) Karim et al. (2005) Sharma (2005) Naveh and Marcus (2005) Terlaak and King (2006) Han et al. (2007) Terziovski and Power (2007) Koc (2007) Bayati and Taghavi (2007) Martinez-Costa and Martinez-Lorenta (2007) McGuire and Dilts (2008) Singh (2008) Kuo et al. (2009) Lo et al. (2009)

n = 1288 n = 129 n = 33 n = 33 n = 192 n = 800 n = 749 n = 52 n = 104 n = 146 n = 400 n = 162 n = 94 n = 43 n = 67 n = 70 n = 1150

Denmark Brazil Hong Kong Singapore Holland Basque region, Spain Spain US Turkey

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No Yes construction No

Singapore No Australia & New No Zealand Malaysia No Greece No US Australia Singapore North America US US Australia Turkish Tehran Spain US Australia Taiwan North America Spain France No

Organizational Financial Financial and organizational Organizational Survey with primary data 2 dimensions of performance Organizational Organizational Organizational Organizational Financial Financial Organizational Organizational Financial Survey with primary data 3 dimensions of performance Survey with primary data 4 dimensions of performance

Descriptive statistics Univariate & multivariate analyses T-test, correlation, & hierarchical linear model analysis n = 19,713 General estimate equation n = 441 n = 400 Structured equation modelling Regression analysis ANOVA Non-parametric sign & Chi-square T-test Market model & market adjusted returns model Structured equation modelling T-test T-test & Wilcoxon signed rank test Mean and covariance structural analysis Propensity matching method

Yes construction No No (org) (fin.) Yes manufacturing Yes electronic & chemical No No No Yes manufacturing No Yes manufacturing Yes one utilities company Yes manufacturing Yes manufacturing No

Survey with primary data 2 dimensions of performance n = 106 Survey with primary data 8 dimensions of performance n = 61 Survey with secondary data 4 dimensions of performance n = 713 Survey with secondary data 2 dimensions of performance n = 204 Survey with primary data 6 dimensions of performance Survey with primary data 1 dimension of performance n = 418 n = 305

Survey with secondary data 3 dimensions of performance n = 1104 Survey with primary data 9 dimensions of performance Survey with secondary data 1 dimension of performance n = 713 n = 1146

Martinez-Costa et al. (2009) Organizational Pekovic and Galia (2009) Organizational

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firstly, project management (PM) performance, in terms of the actual practices undertaken in managing the project and secondly, Project Success, in terms of the outcomes from the practices, which could include tangible measures of success, such as adherence to the schedule, and more intangible measures, such as perceived benefits. A useful analogy is the performance of a football team over the course of a season. The team's ongoing performance can be judged in terms of the activities undertaken on the pitch during each game: for example, the number of tackles made the number of passes to a team-mate, the number of metres covered during the course of a game and the number of shots on goal. This equates to PM performance and the coach will be interested in PM performance when assessing the team's progress and potential for improvement. The team's performance will also be judged by results. Did they win the game? This equates to a very tangible measure of Project Success. But winning the game might not be enough. The crowd might need to be entertained, which is a more intangible measure, similar to measuring benefit on some projects. So the highest performing teams are those that are delivering good performances on the pitch, achieving victories whilst also entertaining spectators in the process. Likewise high performing projects are those delivering against PM performance targets, for example having effective processes and methods for managing the different stages of the project life cycle and against Project Success outcomes i.e. meeting time, cost and quality objectives. 2.1. PM performance 2.1.1. PM Practices It has been posited that the overall performance of a construction project, in terms of delivering something that is fit for purpose whilst at the same time achieving the goals of client and contractors, is a function of the PM Practices undertaken during the construction phase (Serpell and Alarcon, 1998) which is consistent with the notion that having a QMS is crucial to success. The importance of QM, with its emphasis on managing the processes, is evident in the PM literature and guidance given to PM practitioners (Freeman and Beale, 1992; PMI, 2008). A study of the performance of construction projects in Hong Kong found that increased client satisfaction with quality can be achieved by better PM Practices (Chan and Tam, 2000). Given that ISO 9000 is used to assure the quality of the management processes, with these processes relating to the PM Practices of construction projects, it is expected that having ISO 9000 will result in enhanced practices. Testing this proposition is the focus of the first hypothesis. H1. Project managers working in organizations with ISO 9000 certification will perceive a higher level of PM Practices on a recently completed project than those project managers having recently completed a project in non-ISO-9000 certified organizations. 2.1.2. Financial Management (FM) Practices Recent study by Alaghbari et al. (2007) found that problems associated with financial management are one of the main

factors causing delay of building construction projects in Malaysia. Traditionally businesses have measured their financial performance solely in financial terms, profit, turnover, etc. as the measures of a company success (Beatham et al., 2004). However, the traditional financial measures, based on the accounting concepts and practices, are often inappropriate and insufficient (Manoochehri, 1999). These financial measures are lagging indicators as what has happened in the past, and are poor predictors of tomorrow's performance (Parker, 2000). Therefore, processes related to the financial management of projects namely: the financial procedures adopted; the management of financial risks; and the modelling of costs and financial returns can provide timely information as they focus on the actions necessary to reach financial targets, including the expectation of future risks (Cook, 2004). ISO 9000 requires the defining of, and adherence to, key operational processes. Therefore, given the body of evidence emphasising the importance of the processes relating to financial management in construction project environments it is expected that ISO 9000 certification has a positive impact on the adoption of such processes. Hence the second hypothesis is: H2. Project managers working in organizations with ISO 9000 certification will perceive a higher level of FM Practices on their recently completed project than those project managers having recently completed a project in non-ISO-9000 certified organizations. 2.1.3. Project Success Despite the widespread attention paid to the topic there are as yet no universally accepted frameworks for assessing Project Success (Shenhar et al., 2001). Different people, however, assess the success of the projects in different ways, and at different times and each industry, project team or individual has its own definition of success (Chan and Chan, 2004), with Project Success criteria varying from project to project (Muller and Turner (2007)). A project that is perceived as a success by a project manager and team members might be perceived as a failure by the client. Therefore Project Success should be viewed from the different perspective of the individual owner, developer, contractor, user, the general public, and so on (Lim and Mohamed, 1999). These different perspectives will explain the reason why the same project could be considered a success by one party and unsuccessful by another. As such studies of Project Success develop multi-dimensional constructs when researching the topic (Shenhar et al., 2001). Heerkens (2002) suggests that Project Success can be measured on four levels. The first level is meeting project targets, which refers to the original objectives of cost, schedule, quality, and functionality. The second level is project efficiency which is about the way that the project was managed. The third level is customer or user utility, which refers to the extent that the project fulfils its mission of solving a problem, exploiting an opportunity, or otherwise satisfying a need. Finally, the fourth level is organizational improvement, which refers to the wider lessons learnt from the project, which is an area too often neglected in terms of judging the success or otherwise of a project (Forsberg

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et al., 2000). Prior study has reported on the causal relationship between PM Practices and multi-dimensional constructs of Project Success. For example, Bryde (2008) found that PM Practices, specifically related to sponsorship, led to enhanced perceptions of Project Success amongst 238 practitioners in the UK. What is lacking in the literature is how ISO 9000 certification might moderate this causal relationship, which leads to the third hypothesis. H3. ISO 9000 certification will have a positive moderating effect on the relationship which sees an increase in the level of PM Practices leading to perceptions of enhanced levels of Project Success. 3. Method Data were collected using a mailed questionnaire sent to project managers of Malaysian construction companies. The questionnaire was structured in four parts. The first section obtained descriptive data about respondents' organization. The next section asked the respondent to focus on a recently completed project. In section three data were elicited about the PM Practices, FM Practices and Project Success of the recently completed project. The PMPA was used to measure PM Practices (Bryde, 2003). The PMPA is an extensively adopted measurement instrument and has been validated by recently published empirical study (see Qureshi et al., 2009). The framework conforms to the European Foundation for Quality Management Business Excellence Model, which provides a tried and tested framework, an accepted basis for evaluation and a means to facilitate comparisons both internally and externally (Hillman, 1994). PM activities are classed in 5 broad areas: PM leadership, PM staff, PM policy and strategy, PM partnerships and resources and project life cycle management process. These enablers reflect the activities that need to be undertaken to deliver high levels of PM performance. The final area in the PMPA is PM key performance indicators, which focuses on the practices by which actual achievement is measured. The first 21 questions shown in Appendix A correspond to the items in the PMPA. 6 questions relating to FM Practices were developed from prior research (Cook, 2004) and the research team's practical experiences working in the construction industry. Prior work into Project Success was used to derive 10 questions to measure this multi-dimensional construct (Shenhar et al., 2001; Heerkens 2002; Bryde, 2008). The last section obtained demographic characteristics of the respondents. A five-point Likert scale measuring both PM performance and Project Success was used. An abbreviated copy of the final questionnaire is provided in Appendix A. A list of construction companies was obtained from the CIDB's Malaysian Construction Industry Directory 2006 2007, which consists of approximately 130,000 companies with and without QMS certification and is the most comprehensive and accurate database of companies in the Malaysian construction industry. The criterion for selecting ISO 9000certified companies was they must have been certified in 2004

or before, on the assumption that these companies would have completed at least one project since first obtaining certification. A total number of 151 ISO-certified construction companies were identified matching the criterion and these were all included in the survey. For the non-ISO-certified companies a total number of 3437 companies were identified. A sample of approximately 20% of the total population was deemed sufficient for the study and a random number table, as proposed by Salkind (2009), was used to generate 806 companies to include in the survey. 18 (11.9%) of the questionnaires mailed to certified companies and 56 (6.9%) of the questionnaires mailed to non-certified companies were returned as undeliverable. A week after the initial mailing a telephone follow up was done to ensure the questionnaire had been received. If a respondent had not received the questionnaire, another was sent out. Two further follow up calls were made. The final number of completed questionnaires was 336, with 73 respondents (48.3% response rate) from ISO-9000-certified companies and 263 respondents (32.6%) from non-certified. 2 returned questionnaires from ISO-9000-certified and 18 from non-certified companies were deemed to be unusable, giving 71 usable responses (47%) for ISO-9000-certified and 245 usable responses (30.4%) for non-certified companies. This response rate compares favourably with prior studies i.e. Singels et al. (2001) (20% response rate), Escanciano et al. (2002) (19.4%), Naveh and Marcus (2005) (22%), Koc (2007) (34%), Terziovski and Power (2007) (27%), Singh (2008) (41.3%) and Lo et al. (2009) (30.14%). Non-response bias, which involves early respondents being more interested, involved and/or experienced in the subject and hence skewing the findings (Wilson, 1999), was considered. Survey data which involves respondents self-reporting may be subject to this bias (Ruiz-Moreno et al., 2008) so it was possible that some respondents might be returning the questionnaires after the first mailing and without any further prompting due to their perception that PM Practices, FM Practices and Project Success were particularly high. Therefore a t-test for this bias was done by comparing the mean scores of performance and success of those returning the questionnaire first (n = 19) and those returning it last (n = 52), as per Armstrong and Overton (1997). The results showed no significant differences at the 5% level, indicating no bias in responses between early and later respondents i.e. PM Practices (t(69) = 0.723, p = 0.472), FM Practices (t(69) = 0.730, p = 0.468) and Project Success (t(69) = 0.187, p = 0.852). To test hypotheses H1 and H2 the following MANOVA tests were run: a comparison of the overall means of PM Practices and FM Practices between ISO-certified and non-certified construction companies; and an analysis of which of the items of PM Practices, FM Practices and Project Success were significantly different between the two groups. The dependent variables were the results from the most recently completed project across the two areas of project performance. The independent variable was the two groupings namely ISOcertified and non-certified companies. Multiple regression analysis was used to test H3, with Project Success the dependent variable and PM as the predictor. One regression analysis was

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carried out on ISO-certified companies and one on non ISOcertified companies to explore the moderating influence of ISO certification. 3.1. Data analysis The reliability of the questionnaire was tested according to Cronbach's Alpha measurements, with the results as follows: PM Practices (93.5% for ISO-certified, 73.9% for noncertified), FM Practices (78.8% for ISO-certified, 80.4% for non-certified) and Project Success (94.6% for ISO-certified, 83.6% for non-certified). All Alphas were above 70% which is acceptable for further analysis (Nunnally and Bernstein, 1994). The results of item-total statistics showed that there was only a small change in the Cronbach's Alphas if any items were deleted, confirming the appropriateness of further analysis of the data without any items deleted. 3.2. Internal and external validity Two types of validity were considered: internal and external. Since selection of the initial measurement items was based on extensive review of theoretical and empirical literature, it was considered to have internal validity. In terms of external validity, academics from the UK and Malaysia and administrators from CIDB were consulted to test for clarity, relevance and technical accuracy and, in terms of content validation, to check how accurately the items represented the defined constructs. A pilot study of twenty participants, 10 each from ISO-certified and noncertified companies from the sample population, was conducted to test the survey instrument. Additional refinement of the survey was not needed after the pilot study. 3.3. Construct validity A principal component factor analysis with varimax rotation was conducted to validate the underlying structure of PM performance (see Table 2). The KMO measure of sampling adequacy value for the item was 0.67, indicating sufficient intercorrelations. The Bartlett's test of sphericity was also found to be significant (2 = 259.753, p b 0.001) indicating that the data were in order. In interpreting the factor, only a loading of 0.5 or greater on the factor and 0.35 or lower on the other factors are considered. Results of the varimax rotated analysis indicated that eigenvalues of 2.046, which is greater than 1, and explained 58.2% of the variance. The variance explained is considered

satisfactory since it does not exceed the recommended maximum level of 60% (Hair et al., 1998).

4. Evaluation of multivariate assumptions The assumptions for the multivariate MANOVA test were evaluated by procedures suggested by Tabachnick and Fidell (2007). Specifically the data were examined in respect of unequal sample size and missing data, multivariate normality, linearity, outliers, homogeneity of variancecovariance matrices, reliability of covariates and multicollinearity. The sample sizes between the two groups are different but these differences result from the nature of the population and problems are relatively minor especially if analysis is undertaken by computer. Data and distributions for each dependent variable within each group were inspected for missing values, shape, and variance and this revealed no cases of missing data. The robustness of univariate F to modest violations of normality can be ensured if there are at least twenty degrees of freedom for error and a sample size of about twenty in the smallest cell and the data met these criteria, indicating the sampling distribution of means were normally distributed and robustness could be expected. Testing for normality revealed that the data were skewed to the left, though it met the normality assumption as the skewness and kurtosis values ranged from 1 to + 1. In terms of linearity, all dependent variables in each group showed reasonably balanced distributions, so there was no need to further examine scatterplots for each pair of dependent variables. The multivariate outliers were checked using Mahalanobis and Cook's distances. Mahalanobis distance is distributed as a chi-square (2) variable, with degrees of freedom equal to the number of independent variables, and cases with a value greater than the critical chi-square are considered as outliers. For ISO-certified companies, with three variables and a criterion of = .001, the value 11.572 is less than the critical chi-square, 2 = 16.266, therefore no multivariate outliers were present. For non-certified companies, the value 15.059 is also less than the critical chi-square, 2 = 16.266, so again no multivariate outliers were present. Furthermore, the maximum Cook's distance, 0.155 for ISOcertified companies and 0.102 for non-certified companies were b 1, confirming the data was free from multivariate outliers. The homogeneity of variance was tested using the Fmax ratio. For a relatively equal sample size, within a ratio of 4 to 1 or less, for largest to smallest cell size, an Fmax ratio as high as 10 is acceptable as indicating no inflated Type I error. The Fmax ratio of the dependent variables was less than 3, indicating no

Table 2 Factor Analysis and Scale Reliabilities. Measure PM Performance PM Practices PM Project Success PM Financial Management Items 20 10 6 Factor Loading 0.6870.897 0.6070.794 0.5200.842 KMO 0.667 Eigenvalue 2.046 Variance explained (%) 58.195

1050 Table 3 Summary of multivariate effects.

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Value F Group Pillai's Trace Wilks' Lambda Hotelling's Trace Roy's Largest Root 0.061 0.939 0.065 0.065 6.796 6.796 6.796 6.796

Hypothesis df Error df Sig. 3.000 3.000 3.000 3.000 312.000 312.000 312.000 312.000 0.000 0.000 0.000 0.000

evidence of a violation of the equity of variance between the two groups. The homogeneity of variancecovariance between the two groups was also checked using Box's M test, which produced F = 2.383, p N 0.01 supporting the assumption of homogeneity of variancecovariance matrices. The assumption of reliability of covariates is that covariate variables are measured without error, meaning they are perfectly reliable. Based on the nature of scale development and data collection procedures in this study, there is no reason to expect unreliability of a high enough magnitude to invalidate covariate analysis. Multicollinearity was tested from the collinearity diagnostics, where the criteria for multicollinearity is a conditioning index greater than 30 for a given dimension, coupled with variance proportions greater than .50 for at least two different variables. The results revealed that none of the variance proportions was greater than 30 and the data were free from multicollinearity. Finally, the results of Pillai's Trace (F = 6.796, p b 0.01), Wilks' (F = 6.796, p b 0.01), Hotelling's Trace (F = 6.796, p b 0.01), and Roy's Largest Root (F = 6.796, P b 0.01) indicated that for the four MANOVA tests of multivariate differences, the combined dependent variables varied across the two sample groups (see Table 3). Therefore the data were suitable for analysis using the MANOVA test. 5. Results 5.1. Descriptives There were 57 (80.3%) male and 14 (19.7%) female respondents of ISO-certified companies, and 184 (75.1%) male and 61 (24.9%) female respondents of non-ISO companies. Most had more than 15 years experiences in PM (n = 27, 38.0% for ISO-certified companies and n = 86, 35.1% for noncertified companies). A t-test and MANOVA was run to see if there was any respondent bias in respect of the sex or the level of experience. The result of the t-test showed no significant difference between males and females in respect of mean scores for PM Practices, FM Practices and Project Success. The MANOVA showed no significant difference between different

levels of experience and PM Practices, FM Practices and Project Success mean scores [Pillai's Trace (0.377) N Alpha (0.01)]. Of the 71 ISO-certified companies 25 (35.2%) employed less than 25 employees, 15 (21.1%) employed 2550, 16 (22.5%) employed 51100 and 15 (21.1%) employed more than 100. By comparison 186 (75.9%) of the 245 non-certified companies employed b 25 employees, 37 (15.1%) 2550, 20 (8.2%) 51 100 and 2 (0.8%) employed N 100 employees. This indicates that proportionally, larger-sized organizations are more likely to obtain ISO 9000 certification than those that employ smaller numbers of people. 5.2. MANOVA-tests The results of the MANOVA tests are as follows: H1. Project managers working in organizations with ISO 9000 certification will perceive a higher level of PM Practices on a recently completed project than those project managers having recent completed a project in non-ISO-9000 certified organizations. The F test yields a p-value of 0.000, which is lower than the previously selected alpha of 0.05 (see Table 4). Therefore H1 is accepted. One may conclude that there is a significant difference in performing PM Practices between the ISO-certified and noncertified construction companies. As shown in Table 5, MANOVA results reveal that five factors of PM Practices, namely leadership (p = 0.022), staff (p = 0.027), policy and strategy (p = 0.001), project life cycle management process (p = 0.000), and key performance indicators (p = 0.000) are significantly different at p b 0.05 between the two groups. Only one factor, namely, partnerships and resources (p = 0.128) is not significantly different at p b 0.05. H2. Project managers working in organizations with ISO 9000 certification will perceive a higher level of FM Practices on their recently completed project than those project managers having recent completed a project in non-ISO-9000 certified organizations. The F test yielded a p-value of 0.000 (Table 4). With an alpha of 0.05, H2 is accepted. There is significant difference in carrying out FM Practices between the ISO-certified and non-certified construction companies. MANOVA results reveal that five factors, namely financial calculation procedure (p = 0.000), financial contingency plan (p = 0.001), amount loan used (p = 0.039), effect of price escalation (p =0.010) and availability of positive financial returns (p = 0.049) are shown to be significantly different at p b 0.05

Table 4 Summary of MANOVA tests for PM Practices, FM Practices and Project Success. ISO-certified (N = 71) Variables PM Practices FM Practices Project Success Mean 3.8127 3.7441 4.1958 SD 0.39113 0.49828 0.56327 Non-certified (N = 245) Mean 3.5431 3.4476 4.0482 SD 0.48501 0.60043 0.51435 Tests of between-subjects effects 2 4.002 4.840 1.199 F 18.449 14.426 4.341 Sig. 0.000 0.000 0.038

S. Din et al. / International Journal of Project Management 29 (2011) 10441056 Table 5 Summary of MANOVA test on individual factors. ISO-certified (N = 71) Mean PM Practices Leadership Staff Policy and strategy Partnerships and resources Project life cycle management process Key performance indicators FM Practices Financial calculation procedure Financial contingency plan Amount loan used Inflation allowance and price escalation Effect of price escalation Availability of positive financial returns Project Success Within schedule Within budget Efficient management Within quality Works accordingly Use by its intended user Benefit to the intended user Impact on the client's performance Impact on company's business results Lessons learned 3.6845 3.9577 4.0516 3.7394 3.8697 3.7007 4.10 3.96 3.59 3.61 3.70 3.51 3.96 4.00 4.01 4.23 4.21 4.27 4.35 4.23 3.31 4.39 SD 0.49067 0.56535 0.46683 0.60273 0.55719 0.56001 0.539 0.685 0.785 0.746 0.782 0.826 0.977 0.956 0.853 0.721 0.607 0.585 0.588 0.741 0.600 0.686 Non-certified (N = 245) Mean 3.5469 3.7449 3.7918 3.5796 3.4633 3.3122 3.69 3.59 3.34 3.39 3.41 3.26 3.96 3.83 3.90 4.03 4.00 4.02 4.04 4.01 4.29 4.40 SD 0.43074 0.74742 0.57950 0.82158 0.69959 0.75235 0.764 0.823 0.917 0.893 0.853 0.968 0.879 0.884 0.783 0.636 0.668 0.689 0.664 0.698 0.660 0.582 Tests of between-subjects effects 2 1.042 2.494 3.716 1.406 9.094 8.307 9.199 7.370 3.405 2.516 4.693 3.438 0.002 1.618 0.691 2.132 2.363 3.476 5.334 2.500 0.022 0.000 F 5.266 4.935 12.004 2.323 20.230 16.295 17.750 11.685 4.304 3.386 6.693 3.903 0.002 1.994 1.082 4.951 5.503 7.804 12.710 4.989 0.053 0.000

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Sig. 0.022 0.027 0.001 0.128 0.000 0.000 0.000 0.001 0.039 0.067 0.010 0.049 0.000 0.006 0.003 0.016 0.017 0.024 0.004 0.016 0.000 0.000

between the two groups. Only one factor, namely inflation allowance and price escalation (p =0.067) is shown to be not significantly different (Table 5). Furthermore, Table 4 shows there is a significant difference in perceptions of Project Success between the ISO-certified and non-certified construction companies and the MANOVA results reveal that all ten factors of Project Success are significantly different, at p b 0.05, between the two groups (Table 5). 5.3. Multiple regression analyses The results of the multiple regression analyses are as follows: H3. ISO 9000 certification will have a positive moderating effect on the relationship which sees an increase in the level of PM Practices leading to enhanced levels of Project Success. As shown in Tables 6 and 7 respectively, the results at the 5% level of significance indicate that PM Practices accounts for 28.9% of the variance in PM Project Success in the ISOcertified construction companies, and 17.6% in the non ISO-

certified construction companies. Therefore, one concludes that PM Practices is a significant predictor of Project Success. The calculated F-statistics and R for the regression analyses in ISOcertified and non ISO-certified construction companies are significantly different from zero, F(1, 69) = 29.463, and F(1, 243) p b 0.05, respectively, with R2 at 0.299 for ISO-certified and 0.176 for non-certified construction companies (at 95% confidence limit). The adjusted R2 value of 0.289 for ISOcertified for non-certified construction companies indicated that more than one fourth of the variability in PM Project Success was predicted by the number of PM Practices. For non-certified construction companies, the adjusted R 2 value of 0.172 indicated that a smaller amount, approximately one fifth, of the variability in PM Project Success was predicted by the number of PM Practices. These results confirm the fitness of the model and the acceptance of H3. 6. Discussion The survey results, which overall found PM Practices and FM Practices enhanced by ISO 9000 certification, are consistent

Table 6 Summary of regression analysis of pm practices and on project success (ISO-certified companies). Model Independent variable Constant PM Practices
2

Project Success Beta 1.057 0.818

2

Collinearity statistic t-value 1.831 5.428 Sig. 0.071 0.000 Tolerance 1.000 VIF 1.000

Overall model F = 29.463; p b 0.05; and Model 1, R = 0.299; Adjusted R = 0.289. DurbinWatson test = 1.741. Note: N = 71; significant at p b 0.05 (2-tailed).

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Table 7 Summary of regression analysis of PM Practices and on Project Success (non ISO-certified companies). Model Independent variable Constant PM Practices
2

Project Success Beta 2.473 0.445

2

Collinearity statistic t-value 11.197 7.198 Sig. 0.000 0.000 Tolerance 1.000 VIF 1.000

Overall model F = 51.807; p b 0.05; and Model 1, R = 0.176; Adjusted R = 0.172. DurbinWatson test = 1.648. Note: N = 245; significant at p b 0.05 (2-tailed).

with the majority of prior studies, detailed in Table 1, reporting a positive relationship between ISO 9000 certification and elements of organizational performance. The results provide evidence of the synergies that exist between a QMS and a PM system in project-oriented organizations such as construction. For construction companies, where the project is the basic form of organization for its operation, PM and FM Practices are part of an ongoing and repetitive operation to which most of the elements of a QMS would apply (Orwig and Brennan, 2000). They are key business processes and many organizations strive to make such processes part of their business-as-normal activities. In this respect the PM and FM Practices are equitable with the standardised and repetitive processes from manufacturing that are regarded as particularly applicable to the ISO 9000 certification treatment (Kazaz and Birgonul, 2005). They equate to the internal process-oriented measures which studies of ISO 9000 use to measure organization performance. In this respect they are akin to ensuring the quality of the production method, rather than the actual product itself, which is the traditional focus of a QMS. Some of the stated benefits of a QMS, such as ensuring consistency in the level of quality (Pinar et al., 2003) can easily be translated to elements of PM and FM, where undertaking some processes in a standardized and uniform fashion is desirable. As such, a QMS, properly developed and operated, can provide a valuable insight to a project-oriented firm in how to apply appropriate PM processes (Orwig and Brennan, 2000). Specifically ISO 9000 enhances project management processes in the areas of leadership, staffing, policy and strategy, project life cycle management, managing KPIs and financial management activities. The findings also provide confirmatory evidence that enhanced outcomes as measured using multi-dimensional constructs of Project Success (Bryde, 2008), such as meeting client needs on construction projects (Chan and Tam, 2000) can

Fig. 1. The PMPAC model.

be delivered through having a certified QMS. So having ISO 9000, indirectly through its impact on the establishment of project management processes, enhances Project Success in the areas of: adherence to budget, schedule and quality specifications; efficiency of management effort; fitness for purpose; usability; and delivering user and client benefit. In this respect the research findings extend the early work of Serpell (1999), which suggested desirable outcomes could be achieved on construction projects by having a QMS in place, by emphasising the important role of the ISO 9000 certification process, which ensures the QMS conforms to internationally recognised standards. It is worth noting that the research measured perceptions of Project Success and prior work suggest Project Success perceptions are influenced by numerous factors, some of which relate to the essence of the project i.e. the inherent risk involved and some of which are more manageable i.e. the choice of contract type (Sadeh et al., 2000). For project managers, having a well-managed project with a high degree of process control, a focus on quality assurance, good governance and a clear audit trail all of which will be achieved by adhering to the requirements of ISO 9000, are likely to be important. It is likely that, in the case of project managers, the existence of such a project management system, which is set up to meet the requirements of ISO 9000, gives confidence that they are doing things right and, hence, leads to an enhanced perception of Project Success. The absence of a significant difference between ISO 9000 certified and non-certified construction companies in the PM Practice area of partnerships and resources and the FM Practice area of inflation allowance and price escalation reveals possible limitations of a strategy to enhance performance purely based on utilizing QM principles. Prior research in the construction sector highlighted the importance of effective resource management, including all the parties in the supply chain, and the potential benefits of partnering in this respect. Such partnering can bring benefits in terms of fewer adversarial relationships and enhanced client satisfaction, though barriers to partnering include a lack of trust, commitment, communication, role clarity, consistency of approach and flexibility (Brown et al., 2001). The fact that, in comparison to those companies without ISO 9000, those with ISO 9000 reported activities in this area no more enhanced which suggests that having a certified QMS does not contribute to developing partnership approaches. With the focus of ISO 9000 on the management of processes, it is likely that it is not designed, nor capable, of addressing issues such as a lack of trust and commitment amongst project participants, which is

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needed for partnering to take place. In respect of ISO 9000's apparent lack of influence on using practices that allow for inflation and price escalation in the financial management of projects indicates a possible weakness in how ISO 9000 deals with factors linked to the external environment. Estimating future inflation rates and prices is a difficult process in some countries as extraneous factors such as the international and national economic climates, price regulation and government stability increase levels of uncertainty. Again, ISO 9000, with its internal focus, is not particularly designed to address such uncertainty management related to the external environment. It is worth noting that an alternative explanation for the positive associations found between ISO 9000 and elements of project performance could be the existence of a reverse effect. Lo and Humphreys (2000) suggest that PM techniques can be used to develop a project network and resources loading profile to ensure an effective and efficient QMS implementation. It may well be the case that project-oriented organizations have characteristics that enable them to develop a QMS that meets their performance requirements. Therefore, those construction organizations that choose to take the ISO 9000 route have PM skills, experiences and processes to ensure the QMS delivered to them benefits. This alternative explanation highlights the fact that care needs taking in drawing conclusions from the research findings, as stated by Koc (2007) inferences are dangerous as there may be other differences between ISO 9000 certified and non-ISO 9000 certified organizations that help to explain such findings. The confirmation of a link between financial-related activities undertaken during the project and enhanced performance provides the justification for extending the PMPA model (Bryde, 2003), which was the main framework for collecting data about PM performance. In addition to the 5 enablers in the PMPA model: PM Leadership, PM Staff, PM Policy & Strategy, PM Partnerships & Resources and Project Life Cycle Management Processes can be added a 6th enabler, FM Practices. This leads the authors to propose an amended version of the PMPA, which, based on the survey results, is adapted to suit the construction environment. The amended model is labeled the Project Management Performance Assessment for Construction (PMPAC) and is shown diagrammatically in Fig. 1. As shown in Fig. 1, FM Practices becomes an additional element of PM performance, labeled Financial Management, which can result in enhanced outputs and outcomes as measured against the defined PM Key Performance Indicators (KPIs). Some validation of the model was provided through the tests for multicollinearity and correlation between PM Practices and FM Practices, but more in-depth and extensive testing of the model is required as part of future work. 7. Limitations of research and areas for future study Firstly, in terms of limitations of the research reported in this paper, it is recognised that the overall positive relationship between ISO 9000 certification and PM Practices and FM Practices could be due to other factors besides having an

accredited QMS. For example, the experience of the project manager, performance of sub-contractors, and the level of skills and experience of project team members could all be contributory factors. The descriptive statistics show that 38.0% of the respondents of ISO 9000-certified construction companies had more than 15 years experiences in project management compared to a lower percentage (35.1%) of those working for non ISO 999-certified companies. 40.8% of the respondents of ISO 9000-certified companies had experience managing projects with a value of more than RM 100 million compared to only 29.8% of respondents in non ISO 9000certified construction companies. The significance of these differences could be explored in future research. Secondly, the survey results were derived from companies representing the Malaysian construction industry and generalisations beyond this population cannot be made. Future research could collect data from other geographical regions, e.g. US, Europe the Far East, Australasia and South America to see if the findings are replicated and to explore the influence of national culture on any variations in performance (which was outside the scope of this study). Further, to test the external validity of the PMPAC model, additional studies would be needed with increased sample sizes and geographical. Thirdly, the findings are based on the use of self-reported survey data, where respondents were asked to recall the practices and outcomes of their most recent completed project. To assess whether the data were affected by response bias future research could collect data from other project stakeholders, such as clients or end-users. 8. Conclusions To conclude, this paper reports the findings of research into the association between an ISO 9000 certified QMS and performance in construction environments in Malaysia. The research found that, overall, those project managers working on projects in ISO 9000 certified environments reported higher levels of PM and FM Practices on a recently completed project compared to their counterparts working in non-ISO 9000 certified project environments. However there were some notable exceptions, namely: there was no difference between the two groups in the areas of partnering and the management of resources and processes for dealing with inflation and price escalation. These exceptions suggest possible limitations of relying exclusively on a strategy of ISO 9000 to improve construction project performance. The results also indicate that ISO 9000 certification has a positive moderating effect on the causal relationship between PM Practices and Project Success. Overall, the findings suggest a symbiotic relationship between a certified QMS and a PM system in project-oriented organizations such as construction. On the one hand the demands of an ISO 9000 certified QMS, in respect of its role in defining and operating key business processes, which in construction companies are focused on projects, can lead to enhanced organizational performance. On the other hand the knowledge and experiences from operating a PM system can be utilised in designing and managing a QMS that is effective, efficient and fit for purpose.

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The research reported in this paper, which reveals a relationship between ISO 9000 certification and financial management-related activities undertaken by project managers, results in a proposed extension to the Project Management Performance Assessment (PMPA) model
Appendix A. Extract from questionnaire

(Bryde, 2003). This extension provides the rationale for the development of the Project Management Performance Assessment for Construction (PMPAC) model, which incorporates FM Activities as an enabling activity leading to enhanced PM performance.

Within the context of the recently completed project which you have chosen please indicate the extent to which you agree or disagree with the following statements: Strongly Agree Neutral Disagree Strongly agree disagree Project management (PM) leadership The project was a vehicle for tackling business-led change within the organization Assistance was received in identifying the appropriate person to manage the project Features of a projects culture were developed i.e. project focus meeting, a common project language The absence of one feature of a project culture will be covered by the existence of another feature The project environment hindered the development of a project culture PM staff There was a procedure to increase PM capability through the development of team members There was a formal process for evaluating the PM staff PM policy and strategy Awareness of PM was raised by selling the benefits of PM PM was successful when it was developed as a formal practice within the organization The implementation of PM policy & strategy involved major organizational change & obstacles to the change was recognised and overcome PM partnerships and resources There was an open two-way partnership with customers and suppliers during the project span The project stakeholders were formally involved in the project execution PM life cycle management processes A model of critical business processes was used throughout the project life cycle The role of life cycle models was recognized in developing features of a project culture There was a written procedure covering all stages of the project life cycle, including pre & post implementation stages Procedures were updated & benchmarked as response to changing requirements PM key performance indicators (KPIs) The method to manage the important PM KPIs was developed in the organization There was a method to manage project objectives and link delivery of project benefits post implementation There was a procedure for measuring stakeholder perceptions The method against a wide range of PM KPIs, in particular to increase organizational capability, was developed Financial management practices A financial calculation procedure was used There was a financial contingency plan which was readily available The amount used to finance the project is based on the original estimated cost Inflation allowance and price escalation were considered in the cost estimation Early purchase of materials helped to reduce the effect of price escalation Monthly historical costs were used to determine wage rates Project Success The project was completed as per schedule The project was completed within budget The completed project was managed in an efficient manner The project was completed within acceptable quality The output from the completed project functioned as expected The output from the completed project is used by its intended user The output from the completed project has directly benefitted the intended user The output from the completed project has had a positive impact on the client's performance The output from the completed project has a positive impact on my company's business results My company has learned from the completed project and this will lead to better projects in the future Arbuckle, G. K., 2004. A comparative study of selected measures of performance of organizations before and after obtaining ISO 9000 certification as compared to the S&P 500 Index. Indiana State University, USA: PhD Thesis. Armstrong, J.S., Overton, T.S., 1997. Estimating non-response bias in mail surveys. J. Market. Res. 14 (3), 396402. Barad, M., Raz, T., 2000. Contribution of quality management tools and practices to project management performance. Int. J. Qual. Rel. Mgt. 17 (4/5), 571583.

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