Discussion and conclusions
Although previous studies show that institutionalization of quality standards can negatively affect an organization’s effectiveness, there is little evidence from China based on longitudinal panel data. Many stock-listed firms in China have a relatively short history, and a well-established dataset from the country was not available in the early years. In particular, some large and comprehensive databases on quality management standards are now publicly available in the country, facilitating research in this area. In the study, we took advantage of this development and conducted one of the first studies to examine how the value of quality management certifications could deteriorate as time goes by and as the standards are increasingly institutionalized in the country and worldwide. From the institutional approach, institutional environment has a great influence on the development of organizational structure, often more than that from market pressures. Innovations that enhance technical performance in early-adopting organizations become legitimized in the environment. However, these innovations eventually reach a level of legitimization where they are considered as mandates and create pressures for latecomers to follow. These innovations are merely adopted as symbolic conformity and gestures of compliance (Oliver 1991) to obtain and ensure legitimacy within the institutional environment (Meyer and Rowan 1977). Organizations symbolically adopt measures that are superficially prevalent in their environment, such as job titles, organizational roles, and quality management standards. This legitimacy within the institutional environment often ensures a firm’s survival but, unfortunately, hinders firm efficiency and competiveness within the technical environment. To reduce this negative effect, firms often attempt to “decouple” their technical core from legitimizing structures by minimizing evaluations and neglecting program implementation (Meyer & Rowan, 1977).
