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UTILIZATION OF MODERN MANAGEMENT METHODS WITH SPECIAL

EMPHASIS ON ISO 9000 AND 14000 IN CONTEMPORARY CZECH AND SLOVAK
COMPANIES

Conference Paper · September 2013

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 Adam Pawliczek, Radomír Piszczur
Silesian University in Opava, School of Business Administration in Karviná, Department of
Management and Entrepreneurship
Univerzitní náměstí 1934/3, 733 40 Karviná, Czech Republic
pawliczek@opf.slu.cz

UTILIZATION OF MODERN MANAGEMENT METHODS

WITH SPECIAL EMPHASIS ON ISO 9000 AND 14000 IN
CONTEMPORARY CZECH AND SLOVAK COMPANIES

ABSTRACT
Extent of utilization of modern management methods (systems) in companies is important indicator
of advanced and mature management. There exist dozens of modern methods focused on different
branches of management as strategy, production, quality and more. Department of management and
entrepreneurship on Business Administration Faculty of Silesian University in Opava conducted three
rounds of questionnaire research, called “Adaptability of entrepreneurship”, where besides others,
utilization of management methods in companies, as activity preventing managerial misguiding,
leading into entrepreneurship failures and bad economic results, were evaluated. There were
addressed these 16 methods: ISO 9000, ISO 14000, EFQM, TQM, BSC, KPI, EVA, Porter’s 5 forces,
SWOT, BCG, SMART, PEST(LE), MBO, 6-sigma, Kaizen and Lean. Respondents ware further
encouraged by open question to add more methods, they use. Approximately 700 valid questionnaires
were collected back and evaluated during 2nd round of research in the year 2012. The data group was
segmented by branches using NACE classification. There was determined what methods are most
utilized with regard to ISO 9000 and ISO 14000 implementation and furthermore correlation map
(using SPSS software) was created, characterizing, what management methods are implemented
mostly together, with potential synergic effect. Results are interpreted, discussed and compared with
professional literature.

Key Words: management methods, management systems, ISO 9000, ISO 14000, questionnaire
research, Czech and Slovak enterprises

JEL Classification: D22, L15, M11

Introduction
There exist many different management methods and even complex management systems that
were developed during more than last century of capitalist establishments, particularly in Europe,
North America and Japan. This plenty of management methods can be categorized into management
branches as Economy & Finance Management, Facility Management, Informatics & IT Management,
Human Resources Management, Logistics & Transportation, Organizational Management, Marketing
& Sales, Production Management, Quality Management, Crisis Management, Innovation
Management, Process Management, Service Management, Project Management, Risk Management,
Change Management, Knowledge Management, Strategic Management, Security Management,
Planning, Organizing, Leadership & Communication, Decision Making, Control and more [5].
The questions remain in existence: What management method or system to employ or utilize into
company processes? What systems are efficient? Every entrepreneur and management needs to
answer these questions by their own. Goal of this paper is to bring at least partial answer how do deal
with modern management systems and methods contemporary Czech and Slovak enterprises and if
some management methods tend to cluster in practice of these companies.

1. Theory and hypotheses

Prior to launching the questionnaire research we considered thoroughly what management
systems or methods we should ask about the CZ and SK companies, to indicate their knowledge and
involvement into utilization of modern management methods. The different points of view were taken
in account: general familiarity, complexity, specificity, branch of company activity, type of enterprise
and more. Equally we were aware that finite, process-able number of methods has to be selected.
 Finally there were selected 16 seemingly incoherent following systems/ methods to input into
questionnaire:

I. ISO 9000 family (ISO 9001) is part of a family of international standards issued by the ISO
(International Organization for Standardization). Standard ISO 9001 is not a management method,
it is standard or norm, which serves as a reference model for setting the basic management
processes in an organization that continuously helps to improve the quality of provided products or
services and customer satisfaction (that’s why quality management system).
II. ISO 14000 family. ISO 14001 is the world’s most recognized and used for environmental
management systems. This standard requires the organization to identify all environmental
impacts and related aspects of its business. In addition, it defines the objectives of environment
and introduces measures to improve performance through process improvement in areas of high
priority.
III. EFQM Excellence Model also used in short version EFQM Model. The EFQM Model was
developed by the EFQM Foundation as a framework for the implementation of quality
management methods in the organization.
IV. TQM (Total Quality Management) is a very complex management method that puts emphasis on
the quality management in all dimensions of the organizational life. It goes beyond quality
management and it is also a method of strategic management and it is a management philosophy
for all of the organization activities. There are many different forms and interpretations of TQM.
V. BSC (Balanced Scorecard) is a system of management and measurement of the performance of
the organization, which is based on defining a balanced system of interrelated indicators of
business performance. Hence the “balanced”. Balanced Scorecard was developed by American
consultants Robert S. Kaplan and David P. Norton in the nineties of the 20th century.
VI. KPI (Key Performance Indicators) is a term that refers to the performance indicators/metrics
associated with the process, service, organizational unit or the entire organization. KPIs reflect the
desired performance (quality, efficiency or economy).
VII. EVA (Economic Value Added) is a term that refers to the currently very important valuation
measurement of the enterprise performance. The basic idea of the indicator is that invested capital
has to have a greater benefit that the cost of this capital.
VIII. Porter’s 5 forces is the work of Michael E. Porter. It is a way of analyzing the industry and its
risks. The model works with the five elements (Five Forces). The principle of this method is a
forecasting of the development of the competitive situation in analyzed industry, based on the
estimate of the potential behavior of the subjects and objects involved in a given market and
forecasting of the risk of imminent business
IX. SWOT analysis is an universal analytical technique focusing on the evaluation of internal and
external factors affecting the success of an organization or any other evaluated system. Most
often, SWOT analysis is used in the strategic management of an organization in the evaluation of
a strategic intention. The author of SWOT analysis is Albert Humphrey, who designed it in the
sixties of the 20th century.
X. BCG Matrix (Growth-share matrix) is a method that comes from the consulting company Boston
Consulting Group (BCG). From here comes the name BCG matrix or Boston matrix. The BCG
matrix is used for the evaluation of the organization’s product portfolio in marketing and sales
planning.
XI. SMART is an analytical technique for designing objectives in management and planning. SMART
is an acronym from the initial letter of the English names of the objective attributes (Specific,
Measurable, Achievable/Acceptable, Realistic/Relevant, Time Specific/Track-able)
XII. PEST(LE) analysis is an analytical technique used for the strategic analysis of organizational
surroundings. PESTLE (sometimes also PESTEL) is an acronym and each letter represents a
different type of external factors (Political, Economic, Social, Technological, Legal, Ecological)
XIII. MBO (Management by Objectives) was designed by Peter F. Drucker as a method based on
setting and mutual agreement of the objectives and evaluating the success of their achievement.
The task implementers are allowed to decide which method is most appropriate to achieve the
objective. It is a delegation of responsibility for the objective to the implementer. The method is
applicable in virtually all management fields.
XIV. 6-sigma is a complex method of management and, like Lean it is known more as a philosophy
that the organization (enterprise) must take. It is focused on continuous improvement (innovation)
of the organization by understanding customer needs, using the process analysis and methods
standardization in the measurement. It is a comprehensive, flexible management system that is
 based on understanding customer needs and expectations, on disciplined use of information and
data to management and decision making.
XV. Kaizen is a method of gradual improvement based on cultural traditions of Japan (the word itself
comes from the Japanese). The improvement focuses on the gradual optimizing of the processes
and work practices, quality improvement and scrap reducing, material and time savings leading to
cost reduction, work safety and reducing workplace accidents.
XVI. Lean (or Lean Management) is a very broad management method. The term philosophy that the
organization (enterprise) must accept is most often used in the connection with Lean. Lean is
based on several basic principles. Primarily it is the effort of the organization to continuously
improve in all areas and to avoid unnecessary wastage. The second principle is the best possible
customer’s needs satisfaction, no matter how. Lean is often used with different attributes;
depending on what fields this philosophy is applied [2], [4], [5].

Main emphasis was placed on ISO 9000 and ISO 14000 consequences as follow-up of already
published research [8], [9], [10] and further relations with other management methods were tested.
There were formulated three main hypotheses:
H1: ISO 9000 and ISO 14000 are predominantly implemented in branches of Manufacturing and
Construction.
H2: Most enterprises do not utilize any modern management method or system.
H3: It is possible to notice groups or “clusters” of management methods with mutual correlation,
which are implemented jointly.

2. Original research and its methodology

Questionnaire research was realized during spring semester 2012 by students of Business
Entrepreneurship Faculty in Karvina, Silesian University in Opava (Czech Republic). 722 companies
active in Czech and Slovak Republic in time period 2009-2011 were subjects of interest (SMEs are
creating 89% of sample group in accordance with number of employees’ criterion). Interview protocol
included controlled dialogue of a student with an enterprise owner, an executive manager or a top
manager, so the collected data have the character of expert guess opinion. Company identification (10
questions) and identification of a student and his opinion on questionnaire relevance (5 questions) was
necessary part of each form. Initial sample size 722 companies were filtered and reduced to 677
credible items. The questionnaire form also includes nondisclosure statement to provide business and
privacy protection. Moreover data were analyzed anonymously and published as only no-name data.
Data reliability is assured (1) by authorization (contact person, signature, stamp), (2) by subjective
student relevance evaluation, partially (3) by internet verification and (4) by statistical validity (standard
deviation and Pearson correlation index).

Questionnaire was focused on seven areas of interest (2 of 61 questions evaluated):

• Enterprise identification (1 of 10 questions evaluated)
• Enterprise´s strategic management (1 of 6 questions evaluated)
• Economic and financial trends of business, risk management (11 questions),
• Personal politics of company (7 questions)
• Production, services and innovations (8 questions)
• Grants and subsidies (4 questions)
• Energetic and material savings and application of renewable sources (8 questions)
• Sustainability priorities of enterprises (7 questions)

There were evaluated following questions/criteria in presented paper. Numbering of questions

correspond the one used in the questionnaire. Each part had space for possible comment or further
narrative information about questions asked.
Enterprise identification:
 A5: Major branch of economic activity according NACE classification (A – U codes)
Enterprise´s strategic management
 B17: What modern management methods do you know and use? (ISO 9000, ISO 14000,
EFQM, TQM, BSC, KPI, EVA, Porter’s 5 forces, SWOT, BCG, SMART, PEST(LE), MBO, 6-
sigma, Kaizen, Lean and other – open question)

Data were processed by Microsoft Excel® and IBM SPSS® software. Charts and tables are
presented and commented in the next part of article. Discussion with other published related scientific
results is presented later.
 For the reason of comparison analysis data were structured into four data evaluation groups
(except for all data group):
 Enterprises with neither ISO 9000 nor ISO 14000 implemented (414 enterprises) constitute
61% of all data group.
 Enterprises with ISO 9000 implemented (249 enterprises) constitute 37% of all data group.
42% of companies with ISO 9000 have also ISO 14000.
 Enterprises with ISO 14000 implemented (121 enterprises) constitute 18% of all data group.
88% of companies with ISO 14000 have also ISO 9000.
 Enterprises with both ISO 9000 and ISO 14000 implemented (107 enterprises) constitute 16%
of all data group.

3. Findings and results

The following chapter presents most important results concerning utilization of management
methods of Czech and Slovak companies. Figure 1 characterizes relation between implementation of
management systems ISO 9000 and 14000 and branch of economic activity according NACE
classification. Figure 2 characterizes application of different management methods with relation to
implementation of management systems ISO 9000, 14000 and table 1 clarifies furthermore that
relation. Figure 3 shows correlations between applications of different types of management methods.

Figure1: ISO implementation data groups’ (both ISO, ISO 14000, ISO 9000, all data and no
ISO) ratios in European industrial activity classification (NACE) branches.
Source: own processing by authors

Economic activity statistical evaluation (NACE) on figure 1 shows, that most researched companies
(24%) of all data group is active in section C – Manufacturing. Interesting is comparison of both ISO
implemented group – 39% active in Manufacturing to no ISO data group – only 18% active in
Manufacturing (the difference is 21% with advantage to both ISO).
Next strong category of all data group (23%) belong into section G – Wholesale and retail trade;
repair of motor vehicles and motorcycles. Again interesting is comparison of both ISO implemented
group – only 10% active in Wholesale and retail trade to no ISO data group – 29% active in Wholesale
and retail trade (the difference is 19% with advantage to no ISO).
Third strong section is F – Construction: 13% of all data, but 22% of both ISO with comparison to
only 10% of no ISO data group (the difference is 12% with advantage to both ISO). All other sections
are each covered fewer than by 10% of researched enterprises.
 Hypothesis H1 is approved: ISO 9000 and ISO 14000 are predominantly implemented in branches
of Manufacturing and Construction (61% of both ISO group in comparison to only 28% active in
Manufacturing and Construction with no ISO implemented.)

2. ISO 9000 (37%)

3. ISO 14000 (18%)

Figure 2: Ratios of management methods utilization according different data groups

concerning ISO implementation (both ISO, ISO 14000, ISO 9000, all data and no ISO).
Source: own processing by authors

Table 1: Percentage of management methods utilized by specific data group (no ISO, all
data, ISO 9000, ISO 14000 and both ISO)

Source: own processing by authors

Figure 2 clearly shows that generally most well-known and utilized is simple method SWOT (47,3%
of all data group). Second and third most popular are QMS ISO 9000 which use 37% of all data group
and EMS ISO 14000 which use 18% of all data group (lines not included in figure 2 – detailed
analyses were published earlier by Pawliczek [8]). Fourth and fifth position occupies SMART with
16,2% of all data group and TQM with 15,5% of all data group. All other methods are less than at 10%
of all researched enterprises (full grey lines). Hypothesis H2 is confirmed: Most (more than 50%)
enterprises do not utilize any modern management method or system. Slight exception is SWOT
analysis, which employs approximately half of companies. All other methods are fairly under 40% and
lower.
However there is significant sensitivity to ISO implementation which is well described in table 1.
Implementation of either ISO 9000 or both ISO shifts utilization of other management methods to
intensely higher level. This phenomenon is most visible at 6-sigma method (shift from 1,0% to 16,8%
with both ISO), next Kaizen method (shift from 2,7% to 16,8% with both ISO), also basic SWOT (shift
from 42,3% to 55,4% with ISO 9000 alone), TQM (shift from 11,1% to 23,3% with ISO 9000 alone) and
KPI (shift from 3,1% to 14,0% with both ISO). Generally we can say, that no ISO implementation also
means lower interest in other management methods with two exceptions: EVA (slightly more
employed by companies with ISO 14000 and less by companies with ISO 9000) and BCG (very low
sensitivity to ISO).

Figure 3: Modern management methods’ correlation diagram (map) with Pearson

coefficients significant at the 0,01 level calculated by SPSS software
Source: own processing by authors

Figure 3 shows very interesting correlation map characterizing inner interconnections in utilization
of management methods. Strongest Pearson correlation (0,500) we can see between ISO 9000 and
ISO 14000. This phenomenon authors already described in previous works and correlation index
confirms it [8], [9]. Furthermore however we can see medium correlated (0,254-0,470) “production
cluster” of methods plugged into ISO 14000: 6-sigma – Kaizen – Lean – KPI.
There is noticeable another correlation (0,204-0,281) “double-cluster”, bigger and looser: SMART –
PESTLE – BCG – SWOT with associated TQM and SMART – EFQM – MBO – BSC with associated
EVA. Hypothesis H3 is confirmed: It is possible to notice groups or “clusters” of management methods
with mutual correlation, which are implemented jointly. Generally all methods are interconnected at
least by small correlations (dashed line is under 2,00 but still significant at the 0,01 level). Highest
number of correlation linkages has SMART (13), Kaizen and EFQM (12). Most isolated methods are
PESTLE and BCG (5 correlation linkages).

4. Discussion
There was found very limited resources to compare our findings. The most important source [1], [6]
deduces with concordance with us, that “active knowledge of modern management methods is on
relatively low level. Only 22,55% of respondents stated any method of management. Most used
 methods are Lean, 6-sigma and BSC. Most experienced in utilization of modern management
methods are companies active in manufacturing (production)”[1]. Other studies evaluates other sets of
methods as for example TQM, JIT, core competence, outsourcing, network organizations and
benchmarking, so that results are not compatible and comparable [3]. From wider perspective usage
of modern management methods creates “competitive intelligence” – disposal of information and
knowledge about customer, competition and other aspects of external surrounding, where
organization operates for sake of competitive advantage, risk limitation and mapping of potential
opportunities [7]. Even in the area of enterprise performance measurement companies use rather
simple “comparison of plan and reality” method, than BSC, EFQM or other advanced quality
management techniques [11].

Conclusion
Presented paper introduced new findings concerning praxis of enterprises in Czech and Slovak
Republic regarding utilization of modern management methods and systems. There was indicated,
that employment of management system is generally very small. Enterprises use mostly only basic
SWOT analyses. Implementation of ISO 9000 and ISO 14000 management systems also induce
increased awareness and usage of other management methods. Moreover there was found out, that
management methods are utilized jointly, tend to correlate and create so cold “clusters”, for example
“production cluster” including ISO 14000 – 6-sigma – Kaizen – Lean – KPI. The clusters can differ
under management schools used in companies.
The paper was published and described research was realized with the support of students´ grant
system by Silesian University in Opava, grant number SGS/9/2012.

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