Academic journal article International Journal of Management

An Empirical Comparison of Maquiladoras with Mexican Service Firms regarding Compliance to the International Quality Standard ISO 9000

Academic journal article International Journal of Management

An Empirical Comparison of Maquiladoras with Mexican Service Firms regarding Compliance to the International Quality Standard ISO 9000

Article excerpt

Maquiladoras are Mexican assembly plants located on the U.S.-Mexican border in which the engineering, marketing and technical functions are kept in the U.S. and the labor assembly work is performed in Mexico. This paper provides an empirical comparison of compliance to the international quality standard ISO 9000 in maquiladoras and in Mexican service firms. Data analysis revealed that 93% of the maquiladoras are ISO 9000 compliant compared to only 26% of the service firms. The results indicated that there are several important differences in the perceptions of maquiladora managers and those of service managers.

Introduction

Maquiladoras are Mexican assembly plants located on the Mexican side of the United States-Mexico border. A maquiladora plant is a labor-intensive plant in which the labor assembly work is performed in Mexico, whereas the technical, marketing and engineering functions are kept in the United States. The term maquiladora or maquila derives from the Spanish verb "maquilar" which historically refers to the milling of wheat into flour for which the farmer would compensate the miller with a portion of the wheat. The modem meaning of the word indicates the assembly or packaging performed by someone other than the original manufacturer.

The genesis of the maquiladora plant is to take advantage of a special tax arrangement, which allows materials to be transferred into and back out of Mexico in a type of consignment program without having to pay duties on the materials. Import duties are paid only on the foreign value-added. The maquiladora program allows for 100% foreign ownership of any maquiladora operation. Hence, the benefits for their U.S. owners is that the maquiladoras allow the U.S. firms to take advantage of relatively inexpensive Mexican labor while enjoying the close proximity to the U.S. market.

The maquiladora program began in 1966 in North and South Baja California, Mexico and the Mexican state of Chihuahua. The first large plant opened in 1967 under the RCA name in Ciudad Juarez, Mexico just across from El Paso, Texas. It is important to note that 69% of these plants are located within one to 30 miles from the U.S.-Mexico border.

The number of maquiladoras almost doubled between 1991 and 2000, increasing from 2,000 to 3,800. The employment in maquiladoras more than doubled during this period from 550,000 to 1.3 million. However in 2001, over 100 maquiladoras closed and 200,000 jobs were eliminated. This tremendous growth of the maquiladora industry, spurred by the passage of NAFTA, makes it important to analyze ISO 9000 compliance in Mexico.

This paper provides an empirical comparison of the compliance of maquiladoras and Mexican service firms to the standards established by the International Standards Organization known as ISO 9000. The Mexican service firms are not involved in either manufacturing or assembly operations. The Mexican service firms sampled in this study are mostly custom brokers or banks. In this study, all of the 50 Mexican service firms are located in northern Mexico. There have been few, if any, empirical studies conducted on this topic. ISO 9000 is a series of three international standards and guidelines for business management and quality assurance. These standards were first published in 1987 and revised in 1994. ISO 9000 standards do not apply to a specific product, but provide a business model for organizations that design, produce, or test products. Hence the standards can be utilized, by both the manufacturing sector and the service sector.

The ISO 9000 compliance process requires the total commitment, input, and acceptance of all employees. Specifically, this commitment needs to be concentrated in the areas of education, registration and gap analysis, registrar selection, action plans and processes, and registrar audit. The ISO 9000 standards define the quality systems applicable to design, development, production, installation, service, final inspection, and test. …

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