1. Introduction to ISO Jennifer Sawayda Program Specialist
Anderson School of Management
University of New Mexico
Albuquerque, NM

2. What Is ISO?
ISO stands for International Organization for Standardization
ISO is an international organization that publishes global standards to ensure that goods and services are safe, reliable, and of good quality.
Tackles three aspects of sustainable development: economic, social, sustainable
Companies can receive certification for different ISO standards.
Source: ISO website, (accessed October 14, 2014).

3. Why Is ISO Important?
Standards vary from country to country, making them hard to compare.
Is the quality of Chinese goods of the same quality as Japanese goods?
How do you compare the sustainability initiatives of an American company compared to a French company?
How do we know?
Companies can become certified in certain ISO standards, assuring customers that they adhere to best practices developed by a global organization.
Provides an important benchmark for global organizations

4. Facts about ISO Standards
Formed in 1947
Over 19,500 standards published
165 member countries
A technical committee works together to develop a standard, then shares the new standard with the ISO community to vote on.
If a consensus is reached, the standard is adopted. If not, it’s sent back to the technical committee for additional edits.
The committee consists of experts from across the world.
Source: ISO website, (accessed October 14, 2014).

5. Benefits of ISO Standards
World Trade Organization requires members to adhere to international standards of the type developed by ISO
Standards help companies save on costs
Standards reassure customers about the trustworthiness of the company and its products
Standards have been shown to contribute to economic growth

6. Benefits to National Economic Growth
Based on a study published in 2012, growth in organizational standards have impacted the following:
Canada—17% of labor growth, 9% growth in real GDP
France—Standardization contributes 0.81% of economic growth (25% of GDP)
New Zealand—Standards are estimated to lead to a 1% increase in economy-wide GDP (2.4 billion NZ dollars)
Germany—Economic benefits represent about 1% of GDP
United Kingdom—Contributed to 13% of growth in labor productivity (2.5 billion British pounds)
Australia—1% increase in standards has led to 0.17% increase in productivity across economy
Source: ISO, ISO standards: What’s the bottom line? May 2012, (accessed October 14, 2014). ISBN

7. Benefits to Companies
Study of 11 companies (10 countries) show implementing standards can benefit firms between 0.5% and 4% of annual sales revenue
Lobatse Clay (brick manufacturer, Botswana)—Standards had positive impact of 4.96% of earnings
Nanotron Technologies (information and communications, Germany)—14% cost savings, 19% increase in sales revenue
PT Wijaya Karya (pre-cast concrete manufacturer, Indonesia)—0.43% contribution to total revenue
Festo Brasil (automation technology provider, Brazil)—Positive impact of $1.83 million on total earnings
NTUC Fairprice (supermarket chain, Sinapore)—$10.88 million in total benefits over 10-year period.
Source: ISO, ISO standards: What’s the bottom line? May 2012, (accessed October 14, 2014). ISBN

8. Types of ISO Standards ISO 9000: Quality Management
ISO 14000: Environmental Management
ISO 19600: Compliance Management
ISO 22000: Food Management
ISO 26000: Social Responsibility
ISO 27001: Information Security
ISO 50001: Energy Management
ISO 31000: Risk Management

9. Let’s examine some of these more closely to see how they relate to ethics…

10. ISO 9000—Quality
A series of quality assurance standards to ensure consistent product quality under many conditions
Why is it important?
Designed to ensure safe and quality products and processes among certified companies
Important for global companies to compete
Provides framework for documenting how business records, trains employees, tests products, and fixes defects
To become certified, an independent auditor must verify that company’s factory, laboratory, or office meets ISO quality standards
GE Analytical Instruments (United States), Huawei Technologies (China)
Source: O.C. Ferrell, Geoffrey Hirt, Linda Ferrell, Business: A Changing World, 9th edition (New York: McGraw-Hill, 2014), p. 261.

11. ISO 14000—Environmental
Comprehensive set of environmental standards that encourage a cleaner, safer, less wasteful world
Why is it important?
Helpful to the environment
Companies from different countries can find acceptable global solutions to environmental problems despite differing regulations
Intent is to promote more uniform approach to environmental management and help organizations attain and measure improvements in environmental performance
SKF Group (Sweden), NIPPO Batteries (India)
Source: O.C. Ferrell, Geoffrey Hirt, Linda Ferrell, Business: A Changing World, 9th edition (New York: McGraw-Hill, 2014), p

12. ISO 2600—Social Responsibility
Corporate social responsibility guidelines used to promote a common understanding in area of social responsibility
Designed to be used by all types of organizations
Because they are guidelines rather than requirements, it cannot be certified
Why is it important?
The intent of this standard is to use social responsibility to improve lives of workers, natural environments, and communities
Common understanding of social responsibility
Promotion of communication, transparency, and trust among stakeholders
At least 60 countries have adopted ISO as their national standard
Toshiba attempted to incorporate standard into operations
Source: O.C. Ferrell, John Fraedrich, Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 9th ed. (Mason, OH: South-Western Cengage Learning, 2013), p. 39.
Maria Lazarte, “ISO – International forum revisits the road travelled,” ISO, January 10, 2013, (accessed October 14, 2014).
Toshiba, “Management Based on ISO 26000,” (accessed October 14, 2014).

13. 7 Core Subjects of ISO 26000 7 Key Principles of ISO 26000
Accountability
Transparency
Ethical Behavior
Respect, consideration, and response to organizational stakeholders
Respect for rule of law
Respect for international norms of behavior
Respect for human rights
7 Core Subjects of ISO 26000
Organizational Governance
Human Rights
Labor Practices
The Environment
Fair Operating Practices
Customers (Consumer) Issues
Community Involvement and Development
Ministry of Foreign Affairs Netherlands, “International guidelines: ISO on Social Responsibility,” CBI Market Information Database, (accessed October 14, 2014).
Maria Lazarte, “ISO – International forum revisits the road travelled,” ISO, January 10, 2013, (accessed October 14, 2014).
Toshiba, “Management Based on ISO 26000,” (accessed October 14, 2014).

14. ISO 31000—Risk Management
Provides principles and a framework for risk management
Defines risk as “The effect of uncertainty on objectives”
Because they are guidelines rather than requirements, it cannot be certified
Why is it important?
Businesses can use this standard to compare their own systems with ISO as a benchmark; also provides guidelines for internal and external audit programs
5 principles of effective risk management, including continual improvement, full accountability for risks, application of risk management in all decision making, continual communications, and full integration in the organization’s governance structure
More than 40 countries have adopted ISO as national risk management standard
“ISO 3100 and Enterprise Risk Management,” Compliance Online, (accessed October 14, 2014).
Posted by Greg Hutchins, “ISO Risk Management Standard Press Release,” CERM®RISK INSIGHTS, April 1, 2013, (accessed October 14, 2014).

15. ISO 19600—Compliance
Compliance management standard that not only addresses risks and legal requirements but is also intended to meet the needs of stakeholders
Deals with both mandatory requirements (e.g. court judgments, laws, permits) and voluntary (principles, environmental commitments, industry standards)
Because they are guidelines rather than requirements, it cannot be certified
Intended to assist organizations in improving their approaches to compliance management
This allows for small and medium sized organizations to adapt the solutions to their systems
12 principles grouped into 4 themes: commitment, monitoring and measurement, implementation, and continual improvement
PPT presentation presented at 2014 ECOA conference in Atlanta, presented by Martin Tolar, GRC Institute, entitled “The First ISO Standard in E&C: What You Need to Know,” Presented October 2, 2014.
Dick Hortensius, “What Is the General Idea Behind the Proposed ISO 19600?” Ethics Intelligence, April 2014, (accessed October 14, 2014).

16. ISO 19600 continued 3-step process Compliance objectives should
Identify compliance risk by relating obligations to activities to identify areas where noncompliance could happen
Sources of noncompliance should be analyzed against the type of consequences and risk of noncompliance
Results of analysis should be evaluated against level of compliance risk the organization is willing to accept
Compliance objectives should
Meet identified requirements
Be consistent with compliance policy
Be measurable
Be communicated
Be monitored
Undergo updates
PPT presentation presented at 2014 ECOA conference in Atlanta, presented by Martin Tolar, GRC Institute, entitled “The First ISO Standard in E&C: What You Need to Know,” Presented October 2, 2014.

17. ISO 19600 continued Leadership can support compliance management by:
Establishing and upholding organizational values
Ensure the compliance management system is consistent with the organization’s strategy
Ensure that adequate resources are allocated and assigned appropriately
Clearly communicate the compliance management system to all stakeholders
Establish accountability mechanisms that apply to all staff
PPT presentation presented at 2014 ECOA conference in Atlanta, presented by Martin Tolar, GRC Institute, entitled “The First ISO Standard in E&C: What You Need to Know,” Presented October 2, 2014.

18. A Final Thought…
Although adhering to ISO standards may be costly, for many global organizations the benefits far outweigh the costs. Major benefits include:
Being able to compete against other global companies with quality products and efficient processes
A reputation for adopting best practices
Cost savings and sales revenue
Better relationships with stakeholders
And more!
PPT presentation presented at 2014 ECOA conference in Atlanta, presented by Martin Tolar, GRC Institute, entitled “The First ISO Standard in E&C: What You Need to Know,” Presented October 2, 2014.