The economic consequences of ISO 9000 Certification in East and West German firms in the mechanical engineering industry

A central argument of new institutionalism is that organizational success depends not only on efficient coordination and control of productive activities, but on conforming to institutionalized expectations. There is a dearth of empirical studies which analyze the effects of the adoption of institutionalized elements. In our study, we examine the effect of ISO 9000 certification on resource inflow of German mechanical engineering firms. Our findings suggest that organizations are actually rewarded for complying with institutionalized expectations and implementing ISO 9000 standards. Our findings also show that the readiness to comply with institutionalized norms led to different economic consequences in East and West Germany.