Communications of the ACM - Special issue on analysis and modeling in software development
Software quality and the Capability Maturity Model
Communications of the ACM
How ISO 9001 Compares With The CMM
IEEE Software
An Insider's View of CMM Level 5
IEEE Software
The Long-Run Stock Price Performance of Firms with Effective TQM Programs
Management Science
An Empirical Analysis of Productivity and Quality in Software Products
Management Science
Global Diffusion of ISO 9000 Certification Through Supply Chains
Manufacturing & Service Operations Management
Do small IT firms benefit from higher process capability?
Communications of the ACM
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Third-party process certification programs such as the ISO 9001 and capability maturity model (CMM) have been widely adopted in recent years. In this study we employ three competing theoretical frameworks---signaling, efficiency gains, and institutional theory---to analyze the motivations for a firm to acquire quality certification and the performance implications thereafter. We test these hypotheses in the context of CMM certification based on data from the Indian offshore IT services industry between 1997 and 2002. Our results indicate that more cost-effective firms and export-oriented firms are more likely to seek out and acquire certification. In addition, CMM-certified firms show significant improvements in exports, but not on the firm's cost structure. Furthermore, our findings suggest that CMM certification helps indicate firm capabilities to potential customers and thus appear to be most consistent with signaling explanations of certification rather than the efficiency gains or institutional theories.