How does ISO 9001 implementation differ between large and small businesses?
Some find it difficult to understand how a set of requirements like ISO 9001 can apply to ALL types and sizes of businesses. After all, there are differences in products, services, customers from Organisation to Organisation. However, that is the genius of ISO standards. The standard issuers have perfected the skill of creating requirements that must be met, but which level of detail and controls are applied depends on the context of the affected organisation. This is precisely why the existing ISO standards under the Annex XL structure begin with the organisations defining their specific context in detail.
It will be wrong to assume that a small business is a 'little big business'
An old but still relevant Havard Review Article drilled down the root cause of the difference between large and small organisations to ‘resource poverty’ (on the part of the small organisation) and affirms that the differences that emanate from this are so substantial that it will be wrong to assume that a small business is a ‘little big businesses’. On the contrary, small businesses and big businesses are very different kinds of businesses. In this short post, we will select three vital distinguishing characteristics of the two and how they can impact the implementation of ISO 9001 systems.
Resource Constraints- Financial considerations and people availability will always be a characteristic of the small business. It is folly to build an ISO 9001 system that does not allow these considerations. Small companies will have minor to no dedicated team to maintain the ISO system; owner-managers might use a consultant to gain savings on recruiting and retaining a quality manager/team. On the other hand, large businesses will typically have the resources to fund even the best available technology for most parts of their business. In both cases, effective communication is needed in determining schedules of activities and resource consumption of the process. For example- the number of internal audits held might be a financial consideration for the small business.
In contrast, the large corporation is more likely to be open to as many audits as is required to verify regularly that all aspects of its ISO 9001 system are operating as intended throughout the year. Also, focusing on the vital few with regards to the top and bottom lines is so much more critical to the small business. In large enterprises, the scope exists to account for the seemingly ‘trivial many’ because what is trivial to the overall bottom line could be vital to another internal customer, so more monitoring and measuring parameters typically need to be established for the more extensive operation.
In large enterprises, the scope exists to account for the 'trivial many' because what is seemingly trivial to the bottomline could be vital to an internal customer..
Process Approach differences - Large businesses are process-driven and usually have laid down consequences that are enforced when processes are breached. This is necessary because the more complexity and persons involved in a process, the more variation can be introduced. To reduce variation, you firm up processes by documenting them, establishing controls, monitoring them, or automating them. Small businesses are typically less process-driven; the established procedures can sometimes be overridden, even with management backing, sacrificed at the altar of pragmatic productivity. Small businesses in mapping out their processes should typically allow for more flexibility and less minor details to allow for this pragmatism commensurate with risk.
This flexibility is an art rather than a science
The requirements of ISO 9001 focus on organisations using and demonstrating the process approach; there is flexibility on the depth to which this is applied. This flexibility is an art rather than a science, but the art must not be at odds with the science of process controls and its links to producing quality outputs. For example, it will be a mistake to document small business processes to a level of detail that cannot be replicated in practice all the time, as the process will begin to generate non-conformities by design. It is equally wrong to define processes for a large business in broad terms as the sheer variation (due to the longer, more complex processes) will lead to regular defective products or services.
Resilience and its implications- Small businesses are more strongly impacted by changes in their trading environment. They also tend to keep business to production/service and sales fundamentals because long-term planning, say five years is mute in their context. They are very subject to the whims of their trading environment and the competition. They establish a norm that could include well-accepted seasonality of the business. It is not unusual for the owner-manager to ignore or even ratify the suspension of some process control activities in the downtimes when the focus is on cost reduction and delivering on orders. This builds a culture where requirements are not viewed as sacrosanct; hence the implementation of ISO 9001 systems for small businesses must create a delicate balance between achieving process controls to ensure acceptable quality while making space for the flexibility that is inevitable for the type of business it is! Remember, a small business is NOT a ‘little big business’. Larger firms are more robust and less affected by singular incidences in their trading environment. Long term planning allows for the predictability that is not available to the small business.
It is important that small business ISO systems are built for purpose with no unnecessary 'fat'.
Understanding these three points above and the context of the organisation will help build a sustainable ISO 9001 system capable of delivering quality products and services. Access to an in-depth understanding of the requirement of ISO 9001 will ensure that a small company’s systems are built for purpose and without unnecessary ‘fat’ and lack of flexibility that makes it an ongoing burden to the relatively small team or owner-manager by design. And in the case of large businesses, the technical depth and understanding of multiple and complex processes lead to adequate process controls and reduce variation to achieve the consistency required. Simple and effective document control arrangements manage that complexity and communication of change arrangements are agile and robust.
John A. Welsh and Jerry F. White (Havard Business Review July 1981)- A Small Business Is Not a Little Big Business
UKEssays. November 2018. The differences between large and small companies. [online]. Available from: https://www.ukessays.com/essays/business/the-differences-between-large-and-small-companies-business-essay-business-essay.php?vref=1 [Accessed 23 March 2022].