Implementing ISO 14001: is it beneficial for firms in newly industrialized Malaysia

Implementing ISO 14001: is it beneficial for firms in newly industrialized Malaysia? (Tan, 2005) ‘aims to look mainly into perceived benefits derived from ISO 14001 registrations (certification) for firms within a newly industrialized country like Malaysia. The results of a survey on Malaysian firms registered with ISO 14001 indicate that there were benefits to be gained from implementing ISO 14000 standards. Generally, the benefits were rather similar to those documented for companies that adopted ISO 14000 in industrialised countries. ISO 14000 implementation was crucial in bringing about effective environmental management and reduction of damage to the environment, as well as improvement of the company’s image and operations’.

Reasons for seeking ISO certification:

• to gain competitive advantage
• in anticipation of expected incentives from the government
• influence from authoritative parties such as parent company
• moral/corporate responsibility enabling them to show corporate citizenship and PR considerations.
• maintaining competitive position in the global market
• gaining competitive advantage.

Benefits gained from ISO 14001 registration were seen in three broad areas: environmental benefits; competitive advantage; effective operation and improvement to the company’s image. In detail, areas of improvement included:

• Transparency/openness
• Company’s image improved
• Improved work culture
• Less injuries/environmental accidents
• Cost reduction, two –thirds of the companies reported between 5-12% average cost saving. The majority also reported cost saving through waste reduction.
• Many spoke of cost improvement as well as cost reduction; areas of improvement included: increase in overall operating efficiency; reduction in energy usage; cost saving through recycling of product inputs; improved product/service quality; less rejects and reworks; reduced packaging cost
• Better business controls
• Marketing advantages.

Overall, the conclusions of the research state, ‘As for the benefits arising from registration, regardless of the motives, it was generally agreed that as has been found in industrialised countries, ISO 14000 was crucial in bringing about effective environmental management and reduction of damage to the environment, as well as for the improvement of the company’s image’.

‘In many ways, the Malaysian companies surveyed reported similar benefits as their counterparts in other countries after obtaining ISO 14001 registrations. They were perceived to be moving towards achieving clean/green and more efficient operations. For these, they believed they were regarded with an expanded market, improvement in company image and improvement in management’.

‘Of utmost importance is that there were suggestions that the environmentally related benefits had also ‘spilled over’ to the community at large’.

Reference

• Tan, L.P., (2005) ‘Implementing ISO 14001: is it beneficial for firms in newly industrialized Malaysia?’, Journal of Cleaner Production, Volume 13, Issue 4, pp 397–404

University of Malaya, Kuala Lumpur, Malaysia