UNIVERSITI MALAYSIA SABAH

BORANG PENGESAHAN STATUS TESIS

JADUAL

IJAZAH

SESI PENGAJIAN

PERSEPSI TERHADAP KEJAYAAN PERLAKSANAAN ISO 9001:2008 DAN PENGARUH KEPADA KOMITMEN ORGANISASI 01 SABAH ELECTRICITY SON. BHD. (SESB)

MASTER OF BUSINESS ADMINISTRATION

2008 - 2010

Saya, Esther Masulah mengaku membenarkan tesis sarjana ini disimpan di perpustakaan Universiti Malaysia Sabah dengan syarat-syarat kegunaan berikut:

1. Tesis adalah hak milik Universiti Malaysia Sabah. 2.. Perpustakaan Universiti Malaysia Sabah dibenarkan membuat salinan untuk

tujuan pengajian sahaja. 3. Perpustakaan dibenarkan membuat salinan tesis ini sebagai bahan

pertukaran institusi pengajian Tinggi. 4. TIDAK TERHAD

Penulis: 2i6~sulah Alamat: Peti Surat 577, 89507

Penampang, Sabah

Penyella: Prof. Madya Dr. Hjh. Arsiah Hj. Bahron

Tarikh: 28 Jun 2010

Catatan: Tesis dimaksudkan SEBAGAI TESIS ijazah Doktor Falsafah dan Sarjana secara penyelidikan atau disertasi bagi pengajian secara kerja kursus dan penyelidikan atau laporan Projek Sarjana Muda (LPSM)

PERCEPTION OF SUCCESS ON IMPLEMENTATION OF ISO 9001 : 2008

AND ITS INFLUENCE TO ORGANIZATIONAL COMMITMENT IN

SABAH ELECTRICITY SDN. BHD. (SESB)

ESTHER MASULAH

DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

SCHOOL OF BUSINESS AND ECONOMICS UNIVERSITI MALAYSIA SABAH

2010

DECLARATION

I hereby declare that the material in this dissertation is my own except for

quotations, excerpts, equations, summaries and references, which have been dully

acknowledged.

Date 28th June 2010

PE20088201C

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NAME

MATRIC NO

mLE

DEGREE

VIVA DATE

1. SUPERVISOR

CERTIFICATION

ESTHER MASULAH

PE 20088201 C

PERCEPTION OF SUCCESS ON IMPLEMENTATION OF ISO 9001:2008 AND ITS INFLUENCE TO ORGANIZATIONAL COMMITMENT IN SABAH ELECTRICITY SON. BHD. (SESB)

MASTER OF BUSINESS ADMINISTRATION

28 JUNE, 2010

DECLARED BY

(Assoc. Prof. Dr. Hjh. Arsiah Hj. Bahron)1 (Signature)

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ACKNOWLEDGEMENTS

I acknowledge with sincere thanks and appreciation for the various form of assistance facilities and encouragement extended to me by different individuals during the preparation of this dissertation.

Especially to my supervisor, Associate Professor Dr. Hjh. Arsiah Hj. Bahron for her concern, invaluable advice, guidance, suggestions and encouragement throughout the period of this study.

My sincere thanks to Dr. Amran Harun who gave us valuable insights in Research Methodology as a subject.

I would also like to express my gratitude to all my colleagues and friends for extending their kind support to this study.

My deepest and special appreciation also goes to my beloved husband, Boniface Ekol for his extraordinary patient, encouragement, moral support, understanding and inspiration during the challenging years of my study.

Lastly to all my beloved children Cozaac, Cozanne Estrella and Cozaaldo, thank you for understanding and support.

ESTHER MASULAH 28th June, 2010

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ABSTRACT

PERCEPTION OF SUCCESS ON IMPLEMENTATION OF ISO 9001:2008 AND ITS INFLUENCE TO ORGANIZATIONAL COMMITMENT IN

SABAH ELECTRICITY SON. BHO. (SESB)

The main objective of this study is to examine the influence of implementing ISO 9001:2008 to the employees. This study is investigating of employees' perspective on the success of implementation of each element or clause in the ISO 9001:2008 and its influence to organizational commitment. Definition of organizational commitment being adopted was by Allen and Meyer (1990). Primary data was collected by using questionnaires. Samples of 250 employees were targeted particularly from head quarters, Wisma SESB, Kota Kinabalu, Sabah. However, only 142 participated in this study. Data collected was analyzed by using the Statistical Package for Social Science (SPSS). This research used nine (9) hypotheses. The result indicated that there was a Significant relationship between the perceived success of implementation of ISO 9001:2008 elements and organizational commitment. These variables were able to explain 20.2% variance in organizational commitment amongst the employees in SESB. Nevertheless, the relationship between organizational commitment and variables of success of ISO 9001:2008 being implemented was not moderated by job level, years of experience and education background. It is hoped that this research will benefit the ISO 9001:2008 practitioners and those who are planning to get certified with the ISO 9001:2008 system.

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ABSTRAK

Objektif utama kajian ini ada/ah untuk mengenalpasti pengaruh pe/aksanaan sistem kua/iti ISO 9001:2008 kepada peketja. Kajian ini ada/ah berdasarkan kepada perspektif peketja ke atas kejayaan pelaksanaan setiap elemen atau klausa di da/am sistem kua/iti ISO 9001:2008 dan pengaruhnya terhadap komitmen organisasi di ka/angan pekelja. Definisi komitmen organisasi diadaptasikan o/eh A//en dan Meyer (1990). Data prima dipero/ehi me/a/ui soa/ se/idik. Sasaran bagi sampel ada/ah 250 orang peketja daripada pekelja SESB yang bertugas di Ibu Pejabat, Wisma SESe, Kota Kinaba/u/ Sabah. Hanya 142 orang yang telah member mak/um ba/as. Data yang dikumpu/ te/ah diana/isa dengan menggunakan program Statistical Package for Social Science (SPSS). Kajian ini merangkumi sembi/an (9) hipotesis. Keputusan yang dipero/ehi menunjukkan terdapat hubungan yang siginifikasi di antara kejayaan pe/aksanaan e/emen ISO 9001:2008 ini dan telah menunjukkan 20.2% varian da/am pembo/ehubah komltmen organisasi pekelja di SESB. Namun demikian pembo/ehubah moderator iaitu peringkat jawatan/ jangkamasa penga/aman dan /atarbe/akang pendidikan tidak mempunyai kesan terhadap hubungan di antara kejayaan perlaksanaan sistem kua/iti [SO 9001:2008 dan komitmen organisasi di ka/angan peketja. Ada/ah diharapkan kajian ini dapat memberi manfaat kepada pe/aksana ISO 9001:2008 dan mereka yang berhasrat untuk me/aksanakannya.

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TABLE OF CONTENTS

TITLE

DECLARATION

CERTIFICATION

ACKNOWLEDGEMENT

ABSTRACT

ABSTRAK

TABLE OF CONTENTS

LIST OF TABLES

LIST OF FIGURES

LIST OF APPENDICES

CHAPTER 1: INTRODUCTION

1.1

1.2

1.3

1.4 1.5

1.6

1.7

Overview

Problem Statement

Research Questions

Research Objectives

Scope of Study

Significance of the Study

Definition of Terms

1.7.1 Organizational Commitment

a. Affective Commitment

b. Continuous Commitment

c. Normative Commitment

1.7.2 ISO 9001:2008

a. Quality Management System

b. Management Responsibility

c. Resource Management

d. Product Realization

e. Measurement, Analysis &

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CHAPTER 2:

CHAPTER 3:

1.8

Improvement

Organization of Study

COMPANY BACKGROUND

2.1 Overview

2.1.1 Scopes of Certification

2.2 SESB's Business

2.2.1 The Business Description

2.2.2 Vision, Mission & Shared Values

2.2.3 Core Business and Supporting Division

2.3 SESB Quality Manual

2.3.1 Quality Management System

2.3.2 Management Responsibility

2.3.3 Resource Management

2.3.4 Product Realization

2.3.5 Measurement, Analysis & Improvement

LITERATURE REVIEW

3.1 Introduction

3.2 Definition of Concepts

3.2.1 Organizational Commitment

a. Affective Commitment

b. Normative Commitment

c. Continuous Commitment

3.2.2 Definition of Total Quality Management

3.2.3 The Evolution of ISO 9000

3.2.4 The Background of ISO 9000: 1994 & ISO 9000:2000

3.2.5 An Introduction to the "new" ISO 9001:2008

3.2.6 ISO 9001:2008 vs ISO 9001:2000

3.2.7 The Success of ISO 9001:2008 Elements Implementation

3.3 Previous Research on ISO 9001:2008 and Organizational Commitment

3.4 Summary

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CHAPTER 4: RESEARCH METHODOLOGY 42

4.1 Introduction 42

4.2 Research Framework 44

4.3 Definition of Variables 44

4.3.1 Organizational Commitment 44

a. Affective Commitment 45

b. Continuous Commitment 45

c. Normative Commitment 46

4.3.2 ISO 9001: 2008 46

a. Quality Management System 48

b. Management Responsibility 48

c. Resource Management 48

d. Product Realization 48

e. Measurement, Analysis & 49 Improvement

4.3.3 Job Grade 49

4.3.4 Experience 49

4.3.5 Education Background 50

4.4 Hypotheses 50

4.5 Type of Study 51

4.6 Unit of Analysis 52

4.7 Instrument 52

4.8 Population of Samples 53

4.9 Data Collection Method 53

4.10 Data Analysis 53

4.11 Summary 54

CHAPTER 5: RESEARCH FINDINGS 55

5.1 Introduction 55

5.2 Profile of Respondents 55

5.3 Reliability of Measures 57

5.4 Means and Standards Deviations for variables 58

5.5 Testing of Hypotheses 59

5.6 Summary of Findings 64

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CHAPTER 6: DISCUSSION AND CONCLUSION

6.1 Introduction

6.2 Discussion of Findings

6.3 Analysis of Findings

6.3.1 Relationship between Success of ISO 9001:2008 Implementation and Organizational Commitment

6.3.2 Correlation between Quality Management System and Organizational Commitment

6.3.3 Correlation between Management Responsibility and Organizational Commitment

6.3.4 Correlation between Resource Management and Organizational Commitment

6.3.5 Correlation between Product Realization and Organizational Commitment

6.3.6 Correlation between Measurement, Analysis & Improvement and Organizational Commitment

6.3.7 Moderating Effect of Job Level, Experience and Education Background

6.4 Implication of the Study

6.5 Limitations of the Study

6.6 Suggestion for Future Research

6.7 Conclusion

REFERENCES

APPENDIX A - QUESTIONNAIRE

APPENDIX B - FREQUENCY &. DESCRIPTIVE STATISTIC

APPENDIX C - CRONBACH'S ALPHA

APPENDIX D - LINEAR REGRESSIONS

APPENDIX E - BIVARIATE CORRELATION ANALYSIS

APPENDIX F - HIERARCHICAL REGRESSION ANALYSIS

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LIST OF TABLES

Page

Table 4.1: ISO 9001:2008 Variables 47

Table 4.2: Section B - ISO 9001:2008 Elements 51

Table 4.3: Section C - Organizational Commitment 51

Table 4.4: List of Statistical Method for Testing 54

Table 5.1: Respondents Job Grade Profile 55

Table 5.2: Respondents Gender Profile 56

Table 5.3: Respondents Age Profile 56

Table 5.4: Respondents Education Profile 56

Table 5.5: Respondents Job Tenure Profile 57

Table 5.6: Cronbach's Alpha For Variables 58

Table 5.7: Descriptive Statistics of Variables 58

Table 5.8: Linear Regressions for Independent Variables and 60 Dependant Variables

Table 5.9: Regression Testing for Independent Variables 60

Table 5.10: Bivariate Correlations for Independent Variables and 60 Dependant Variables

Table 5.11: Hierarchical Regression Analysis on Moderating Variable 63

Table 5.12: Summary Table of Hypotheses Testing 64

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LIST OF FIGURES

Page

Figure 4.1: Framework of the Relationship between The Success of 44 ISO 9001:2008 Elements Being Implemented and Organizational Commitment

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LIST OF APPENDICES

Page

Appendix A: Sample of Questionnaire 83

Appendix B: Frequency & Descriptive Statistic 91

Appendix C: Cronbach's Alpha 103

Appendix D: Linear Regressions 105

Appendix E: Bivariate Correlation Analysis 106

Appendix F: Hierarchical Regression Analysis 107

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CHAPTER 1

INTRODUCTION

1.1 Overview

The concepts of total quality management (TQM) and the ISO 9000 are no longer

new to the Malaysian Industries. Even though the ISO 9000 family of quality

standards was launched in 1987, the Malaysian industries only realized the benefit

when some of the firms were awarded "registered firm" in 1988 according to Idris

et a/./(1996).

The ISO 9000 Quality System is a dynamic and comprehensive set of

standards for a companywide quality system. It is conceived to help companies

effectively document the quality system elements needed to maintain an efficient

quality system, as well as to improve total quality in all business for the benefits of

producers and consumers alike as mentioned by Hirefoudar (2006): 1 in his study

on employee's issues in the implementations of ISO 9000 quality system in

manufacturing companies in Malaysia.

ISO (the International Organization for Standardization) is a worldwide

federation of national standards bodies (ISO member bodies), Standards Malaysia

(2009)

In Malaysia, ISO 9000 was renamed as MS ISO, Zainon (2001 : 5)

Malaysian Standards (MS) are developed through consensus by committees which

comprise of balanced representation of producers, users, consumers and others

with relevant interests, as may be appropriate to the subject in hand. To the

greatest extent possible, Malaysian Standards are aligned to or are adoption of

international standards. Approval of a standard as a Malaysian Standard is

governed by the Standards of Malaysia Act 1996 (Act 549). Malaysian Standards

are reviewed periodically. The use of Malaysian Standards is voluntary except in so

far as they are made mandatory by regulatory authorities by means of regulations,

local by-laws or any other similar ways.

The Department of Standards appoints SIRIM Berhad as the agent to

develop Malaysian Standards. The Department also appoints SIRIM Berhad as the

agent for distribution and sale of Malaysian Standards, Standards Malaysia (2009)

In this study, the researcher uses new ISO 9001, version 2008 - model of

quality assurance system in design, development, production, installation, and

servicing replacing the ISO 9001, version 2000 which was cancelled, Standards

Malaysia (2009)

The scope under MS ISO version 2008 remains unchanged with that of

version 2000. Nevertheless, the 2008 version has detailed out and improved on

work process that was outlined in the 2000 version, Standards Malaysia (2009)

Organizational commitment in recent years has become an important

concept in the understanding of employees' behavior in the workplace. It reflects

the extent to which employee's identity with an organization and is committed to

the goals. Theory predicts that highly committed employees should be motivated

to attend and facilitate organizational goal attainment (Mowday et al.,1982).

According to the model by Meyer and Allen (1991) organizational

commitment is composed of three components. There are affective, continuance

and normative commitments. Each components reflects a psychological state that

has implications to continue or discontinue membership in the organization, the

nature of these states differs.

Conversion to an ISO 9001:2008 quality management system environment

results in significant changes in organizational commitment in the employees. For

the purpose of this study, the researcher will attempt to explore the elements of

ISO 9001:2008 and organizational commitment in SESB.

1.2 Problem Statement

Previous researchers conducted on the impact of ISO 9000 implementation to the

organization revealed many positive results such as performance and profitability.

2

What about the influence to the individual's commitment? Literature assumes that

application of quality management system improves performance but at the

individual level this may not be true and it may enlarge the job scope, require

more knowledge and skill.

Experienced of ISO 9001:2008 being successfully implemented in Sabah

Electricity Sdn. Bhd. (SESB) may result in the improvement of employees'

commitment and performance. However, the reaction of employees is likely to vary

from one organization to another depending on the perceived of degrees of the

success of ISO 9001:2008 being implemented. After being implemented, the

researcher wants to study how it is expected to influence the employees' attitude

and behavior in SESB.

The attitude and behavior of employees in the organization is critical in

achieving the ISO 9000 registration and maintaining the certified quality system

(Cheng and Tummala, 1998). This agrees with Jasni and Hazman (2003) findings

that the perceptions and roles of the employees in the implementation of ISO 9000

playa major role in the perceived outcomes. Therefore, the research question is

"to what extent does the employees perception on the success of ISO 9001:2008

elements (Le. quality management system, management responsibility, resources

management, product realization and measurement, analysis and improvement)

being implemented affect the employees' commitment and to what extent the

relationships between the five independent variables and employees' commitment

are moderated by job level, experience and education background.

1.3 Research Questions

This study attempted to answer the following research questions from the

employees' perceptions:

1. What is the relationship between the employees' perceptions on the

success of ISO 9001:2008 elements being implemented with the

employees' organizational commitment?

3

2. To what extent the employees' perception on the success of Quality

Management System being implemented influences their organizational

commitment?

3. To what extent the employees' perception on the success of Management

Responsibility being implemented influences their organizational

commitment?

4. To what extent the employees' perception on the success of Resource

Management being implemented influences their organizational

commitment?

5. To what extent the employees' perception on the success of Product

Realization being implemented influences their organizational commitment?

6. To what extent the employees' perception on the success of Measurement,

Analysis & Improvement being implemented influences their organizational

commitment?

7. To what extent The Job Level moderates the relationship between the

success of ISO 9001:2008 elements being implemented with the

employees' organizational commitment?

8. To what extent Experience moderates the relationship between the success

of ISO 9001:2008 elements being implemented with the employees'

organizational commitment?

9. To what extent Educational Background moderates the relationship

between the success of ISO 9001 :2008 elements being implemented with

the employees' organizational commitment?

4

1.4 Research Objectives

The main objective of this research is to examine the perception of employees' of

the success of ISO 9001:2008 elements being implemented in SESB and its

influence on organizational commitment. This study attempts to:

1. Assess the employees' perception on the success of ISO 9001:2008

elements namely quality management system, management responsibility,

resources management, product realization and measurement, analysis and

improvement being implemented.

2. Assess its correlation between the successes of ISO 9001:2008 elements

being implemented and organizational commitment by the employees.

3. Assess the impact of employees' job level, experience and education

background on the relationship between the successes of ISO 9001:2008

element being implemented and organizational commitment by the

employees.

As a whole, this research is concerned with the perception of employees

from ISO 9001:2008 in SESB on the impact of ISO 9001:2008 implementation to

the organizational commitment. The elements of ISO 9001:2008 being studied

here are the clauses of the standard requirement as specified in the ISO

9001:2008. The effect of the moderating variable to the relationship between the

independent variables and the dependent variables would also be highlighted.

1.5 Scope of the Study

The researcher was using cross sectional for this study where the respondent was

given a set of questionnaire to be completed and a ball point pen as a token. The

focus of this study is on the commitment of the employees towards their

organization and how the implementation of ISO 9001:2008 could affect the

employees' organizational commitment. This study was conducted among all level

of employees in Sabah Electricity Sdn. Bhd. (SESB) particularly in the Head

5

Quarters, Wisma SESB, Kota Kinabalu, Sabah. Generally all the employees in Head

Quarters are directly involved with the quality system.

1.6 Significance of the Study

The study would be useful for SESB to determine the perception of success on

implementing ofISO 9001:2008 in SESB and also will be able to use the findings of

this study in its influence on organizational commitment. This study would enable

the management of SESB to objectively clarify the success factor of ISO 9001:2008

elements being implemented in their establishment. The management would have

a bigger insight and knowledge of the awareness of ISO 9001:2008

implementation on their employees. This eventually will help to promote the

mutual understanding between management and the employees as well as to

strengthen the corporation within the organization.

Management in SESB can use the result of the study as consideration to

determine the critical elements of ISO 9001:2008 that contribute to the success of

implementation. They can also use the findings of the study to determine the way

of approach in implementing the system to ensure that there is an organizational

commitment from the employees.

ISO 9001:2008 is new in SESB, the changes will bring in attitude as well as

behavioral change. Therefore, management needs to see whether any new change

will have positive or negative effect on employees' attitude. This study would also

benefit SESB in their administrations such as organizational commitment of future

projects. Execution and implementation of projects, which would involve change in

the company's policies, might result in changes in employees' attitudes and

perception. With this study, SESB would be able to handles the situation better.

1.7 Definition of Terms

A brief definition on the terms in this study is given below.

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1.7.1 Organization Commitment

Organization commitment is the strength of attachment of an individual to his or

her organization (Arnold et al., 1998).

a. Affective Commitment

Affective commitment is the psychological attachment a person towards

his/her organization (Meyer and Allen, 1991).

b. Continuous Commitment

Continuous commitment is as person's perception of the cost & risk

associated with leaving their current organization (Allen and Meyer, 1990).

c. Normative Commitment

Meyer and Allen (1991) define that normative commitment is a feeling or

moral obligation or responsibility towards an organization.

1.7.2 ISO 9001:2008

ISO 9000 comes from a non-governmentally run organization established in 1947 -

the International Organization for Standardization (150)- and is a combination of

national standards form 100 countries (Mohammad Talha, 2004)

The International Organization for Standardization (ISO) developed a set of

quality standards, ISO 9000, as a model for quality assurance standards in deSign,

development, production, installation and service. ISO 9000 is a series of

internationally accepted guidelines as to how companies should set up quality

assurance systems. Focusing on procedures, controls, and documentation, the

standards are designed to help a company identify mistakes, streamline its

operations and be able to guarantee a consistent level of quality. The standards

are not specific to products or services, but apply to all processes. They are

generic and therefore can be used by manufacturing and service organizations

(Kartha, 2004).

7

According to Praxiom Research Group Limited (2009), ISO 9001:2008 is a

new version replacing ISO 9001:2000. It introduces changes intended to improve

consistency with ISO 14001:2004 (ISO, 2008a).

There are five major clauses in the ISO 9001 which are Quality

Management System, Management Responsibility, Resource Management, Product

Realization and Measurement, Analysis & Improvement. Each major clause has

sub-clauses.

a. Quality Management System (QMS)

i. General requirements

ii. Documentation requirements

b. Management Responsibility

i. Management commitment

ii. Customer focus

iii. Quality policy

iv. Planning

v. Responsibility, authority and communication

vi. Management review

c. Resource Management

i. Provision of resources

ii. Human resources

iii. Infrastructu re

iv. Work environment

d. Product Realization

i. Planning of product realization

ii. Customer-related processes

iii. Design and/or development

iv. Purchasing

v. Production and service operation

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vi. Control of measuring and monitoring devices

e. Measurement, analysis and improvement

i. General

ii. Planning

iii. Monitoring and measurement

iv. Control of non-conforming product

v. Analysis of data

vi. Improvement

1.8 Organization of the Study

This study comprises of five chapters, which explains the study in details from

introduction to conclusion. The content of each chapter is as follows:-

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Explaining the topic of study, research problem, objectives of

study, scope of study, significance of study and brief

explanation on the company's background

Brief explanation of company's background

Discussions on literature review and previous study related

to the topic

Explaining the research framework of the study and research

methodology applied

Explaining the result of the study

Discussion on the result and the conclusion of the study

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CHAPTER 2

COMPANY BACKGROUND

2.1 Overview

Sabah Electricity Sdn. Bhd. (SESB) is a company 80% owned by Tenaga Nasional

Berhad with the remaining 20% owned by the Sabah State Government. The

company is solely responsible for the generation, transmission and distribution of

electricity in the state of Sabah and the Federal Territory of Labuan.

As Mac 2010, the company had staff strength of 2326, comprising of senior

management staff, executives and non-executives. As at 31 March 2010, SESB had

a customer base of 425,304.

SESB has successfully obtained ISO 9001:2008 certifications by SIRIM on

20th August 2009. This recognition was received from Certification Panel of SIRIM

QAS International Sdn. Bhd.

2.1.1 Scopes of Certification are:-

a. Provision of Quality Management Support & Customer Services related to

Generation, Transmission & Distribution of Electricity,

b. Planning, Engineering, Construction, Installation, Testing, Commissioning &

Maintenance Services of Electrical Power Generation, Transmission &

Distribution facilities.

2.2 SESB's Business

2.2.1 The Business Description

The business description of SESB is Generating, Transmitting, Distribution and

sales of electricity in Sabah and Federal Territory of Labuan, with a view to

promote and encourage economic development to the area.

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