Managerial Relevance of Internal Audit

The TQM Journal
Managerial relevance of internal audit: Business benefits of using ISO 9000 internal
audit as a managerial tool
Milena Ali# Borut Rusjan
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Nava Subramaniam, Peter Carey, Dominic S.B. Soh, Nonna Martinov-Bennie, (2011),"The internal audit
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Milena Ali#, Borut Rusjan, (2010),"Contribution of the ISO 9001 internal audit to business performance",
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Madhav Sinha, Hector Hernandez, (2010),"Quality audit as a driver for compliance to ISO 9001:2008
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TQM
23,3
284
Managerial relevance of internal

audit
Business benefits of using ISO 9000 internal
audit as a managerial tool
Milena Alic
Received March 2009

Revised September 2009
Accepted November 2009
Mercator, d.d., Ljubljana, Slovenia, and
Borut Rusjan
Faculty of Economics, University of Ljubljana, Ljubljana, Slovenia

Abstract
Purpose In order to stimulate the interest of company management in the business perspective of
internal audit this paper aims to investigate the possibilities of using internal audit as a helpful
managerial tool and describes the benefits of such use.
Design/methodology/approach The benefits of IA as a managerial tool are investigated on a
review of the relevant literature. Theoretically based findings are tested analytically using evidence
from empirical research and empirically by a case study research.
Findings Internal audit outcomes and benefits for management depend on the purpose of internal
audit and on managers support and expectations about it. The paper shows that in order to use
internal audit as an effective managerial tool, internal audit has to be appropriately integrated within a
strategic management system. The greatest benefits can be achieved by companies that are internally
motivated to introduce the QMS which have a mature quality culture and QMS and their quality
objectives linked to the business ones.
Practical implications Discussing internal audit benefits from a managerial point of view is not a
common approach in the professional literature on this topic. However, covering managers needs by
using quality tools is one of the most important issues companies should understand in order to make
these tools attractive and beneficial. Showing the results of a real-life case can convince managers from
other companies that benefits of using IA as a managerial tool are tangible.
Originality/value Internal audit purpose and results have been theoretically integrated within a
broader managerial system of the company. This enables identification of possible business benefits
resulting from appropriate implementation of internal audit itself and possible business benefits related
to QMS and strategic management system of the company that can be affected through appropriate IA
implementation.
Keywords Quality management, Internal auditing, Strategic management
Paper type Case study
The TQM Journal

Vol. 23 No. 3, 2012
pp. 284-300
q Emerald Group Publishing Limited
1754-2731
DOI 10.1108/17542731111124343
Introduction
Quality management systems help companies develop and retain a proper and stable
level of quality of their products by controlling the production process and other
business processes supporting it. ISO 9000 series of international quality standards
provide a framework for such a quality management system (QMS). In addition, they
give companies an opportunity to signal the quality of their business by acquiring an
ISO 9001 certificate.
Internal audit (IA) is one of the techniques required by ISO 9001 standard. The main
purpose of conducting an IA is to check for compliance with requirements of the ISO
9001 standard and to report any identified non-conformities as a basis for further
corrective actions to eliminate them (ISO 9001:2008, Ch. 8.2.2). By eliminating
non-conformities the company formally meets requirements for attaining or
maintaining ISO 9001 certificate.
However, with strong management support it is possible to upgrade the IA from
solely checking for compliance to searching for possible improvements. Such audits are
considered as internal audits that add value (Liebesman, 2002; Hutchins, 2002; Piskar,
2004; Pivka and Smogavc Cestar, 2004). Benefits of implemented IA largely depend on
managements understanding of IA, on managements attitude to IA, and on how
management responds to IA findings (Razzetti, 2003; Bauer, 2005; Mihret and Yismaw,
2007) and stimulates the auditors (Hutchins, 2002). This managerial attitude to and
support for IA relates to the companys motivation to implement the QMS (Terziovski
and Power, 2007) and to the managers expectation of IAs effects (ISO 9001 Auditing
Practices Group, 2004).
Companies often do not exploit different opportunities to achieve benefits that could
be provided by appropriate implementation of an IA. The purpose of our paper is
therefore to investigate what benefits an IA can provide to managers in case it is used
as a managerial tool and empirically test realisation of those benefits with the use of a
case study. The next section clarifies the role of an IA as a QMS tool and the
characteristics needed for an IA to become a managerial tool. Fourth section explains
the methodology used in the empirical verification of IA benefits, while the last section
presents results of testing the hypothesis by researching a case study.
2. IA can play a different role within a company
IA as a QMS tool can be conducted for different purposes and objectives and hence in
different ways. Figure 1 shows that expected IA purpose and outcome depend on the
purpose or motivation for introducing the QMS. The usual goal of companies
introducing the QMS due to pressure from customers is merely to acquire the
certificate (Van der Wiele and Brown, 2002; Llopis and Tari, 2003). These companies
having only an external motive implement only a compliance audit, which simply
checks formal conformity with the quality standard, enables maintaining the
certificate and normally leads to no improvement in company effectiveness and
efficiency it often brings only additional bureaucracy instead (Dittenhofer, 2001;
Pivka and Smogavc Cestar, 2004).
As the QMS becomes more mature, managements expectations of IAs effects are
increasing, so the purpose and orientation of IA can be changed from compliance to
continuous improvement and management audit (Zhang, 2002; Russell, 2004). Its
control-inspection focus should be shifted to a preventive one resulting in continuous
improvement (Zhang, 2002; Hutchins, 2002). IA findings, which represent the potential
for corrective and preventive actions can contribute to a QMS improvement and to
achievement of related business objectives (Miyashiro, 1996; Beckett and Murray,
2000; Razzetti, 2003; Russell, 2004; Hall, 2007). The general direction of further
development of IA into a management audit is given by recommendations of standards
ISO 19011:2002, ISO 9004:2002, and ISO 10014:2006. Figure 1 shows that such an IA is
characteristic for companies which have a mature QMS and are internally motivated to
Internal audit
285
TQM
23,3
286
Figure 1.
Expected internal audit
outcomes
improve their effectiveness (our target group of companies). These companies are
motivated to ensure that their quality objectives are related to business objectives, and
consequentially the IA objectives are wider and related to the business objectives, too
(through quality objectives) (ISO 9004:2002, Ch. 8.2.1.3; ISO 10014:2006, pp. V, VI, 4-1;
Russell, 2004; Pivka and Smogavc Cestar, 2004).
Figure 1 therefore shows different possible business benefits of IA implementation
through identification of relationships of IA with QMS and strategic management
(strategic goals) of the company. Effects recognised as the benefits for managers are
marked in the figure in bold text. Dotted arrows in Figure 1 show relations between the
business and IA objectives, full arrows show the impact of IA results on attainment of
these objectives.
3. Hypothesis development
Based on the possible IA benefits identified above and on discussion of research
evidence from the literature we develop four hypotheses of business benefits related to
the implementation of IA. The first two hypotheses represent the possible benefits
resulting from appropriate implementation of IA itself and the last two represent
possible benefits related to QMS and strategic management system of the company
that can be affected through appropriate IA implementation.
Control and discussion at the auditors visit is focused on the evidence of correct
task and procedure planning and of their execution, therefore IA may influence
workers attitudes to the quality of their work. When preparing for an audit both
auditors and workers review work processes, documentation and records. So they
renew their knowledge and possibly find something in the documentation or
implementation that should be corrected. Therefore the control function of an IA can
help achieve the desired work results by stimulating workers to work better.
In order to achieve that, both auditors and auditees should co-operate within the
audit process by having an open conversation without hiding the facts (Razzetti, 2003).
Managers should show some understanding in the case of detected non-conformities
and regard them as a chance for improvement. Empirical evidence supports our claim
with cases (Poksinska et al., 2006) of companies that experienced audits as an
important enabling and motivating factor.
Our first hypothesis related to business benefits of IA therefore is:
H1. Internal audits stimulate workers to work better (following the procedures
and rules, more effective and more efficient work).
Auditors can detect cases of good practices through IA and spread these good practices
and ideas to other environments by discussing them and by suggesting their use
through written recommendations. This has two positive effects. It improves the
business performance of the organisational units which implement the recommended
good practices. At the same time, it represents an acknowledgement to those workers
who developed it and in this way improves their satisfaction.
Openness and trust needed for exchange of information is created by making
internal audits as non-threatening as possible (Litsikas, 1997). Working together in
preparation for an IA creates a shared understanding as well as common memories,
and ISO documentation stores those memories for future workers (Miyashiro, 1996).
Some empirical evidence from the literature review supports our claim that IA assists
Internal audit
287
TQM
23,3
288
the transfer of know how among employees and helps detect good practices and spread
them inside the company (Beckett and Murray, 2000; Pivka and Smogavc Cestar, 2004;
Lin and Wu, 2005; Hall, 2007).
Our second hypothesis related to business benefits of IA therefore is:
H2. Internal audits represent a means to exchange knowledge and spread good
practices.
Hutchins (2002) sees IA as a problem solving tool and an independent unbiased
advising activity which is intended to add value and improve a companys business by
improving the effectiveness of controls and thus decreasing risks. Results of previous
empirical research support the claim that IA should be used as a management tool for
stimulating improvements in QMS resulting in improved processes effectiveness and
efficiency (Pivka and Smogavc Cestar, 2004). A total of 89.9 per cent of the companies
in a Slovenian survey support this claim (Piskar, 2003, p. 152). A survey in Spain (Tari
and Sabater, 2004) showed that 84 per cent of companies use IA as a basis for
development of their QMS. Some other surveys and case studies have confirmed IAs
contribution to business improvement (Kaye and Anderson, 1999).
Our third hypothesis related to business benefits of IA therefore is:
H3. Internal audits represent a means to stimulate business improvements.
In companies where QMS and IA objectives are linked to the companys business
objectives (see Figure 1) an IA can be implemented as a continuous improvement audit
or management audit and have a positive effect on attainment of the companys
business objectives. Some empirical research supports this claim. Rajendran and
Devadasan (2005) found that organisational improvements due to the conduct of an IA
include improved product quality, a reduction of waste, improved service quality, cost
reductions and better and more consistent delivery schedules to customers.
Our fourth hypothesis related to business benefits of IA therefore is:
H4. Internal audits help managers attain the business objectives of the company.
4. Methodology
Based on theoretical research four hypotheses were developed related to benefits of IA
as a managerial tool. Hypotheses were tested analytically using evidence from
previous empirical research and empirically by case study research (Yin, 2003a, pp. 4-8;
Yin, 2003b, pp. 13-14, 19-55) involving the biggest Slovenian certified company,
Mercator (a retail trading company), having a mature QMS. We analysed whether this
case supported findings derived from studying the literature and previous research. By
using the case study our objective was to expand and generalise theory (an analytical
generalisation instead of a statistical one).
The object of our research was the internal audit of Mercator carried out in
2004/2005 in 317 organisational units. Ten lead auditors and 127 internal auditors were
involved. As a result of the IA 402 findings were documented: 67 non-conformities, 145
recommendations, six examples of good practice.
An anonymous survey study was conducted to collect subjective opinions about the
impact of internal audit in three target groups of employees: internal auditors (mostly
operational professionals, manager assistants and a few low-level managers), audited
operational managers (heads of the audited stores and offices) and the managers of the
audited organisational units (middle managers). We sent out 119 questionnaires (52 to
internal auditors, 50 to operational managers and 17 to the middle managers) and we
received 95 completed ones.
The questionnaire addressed different effects of using the IA in the company by
setting five groups of questions. First group of three questions related to the opinion on
the benefits of using the IA as managerial tool. Next four groups of questions included
questions on separate expected positive and negative effects of IA on attaining the
company business objectives and thus on an improvement in business performance.
These expected effects of IA were identified from a literature review (Magd and Curry,
2003; Mathews, 2005) as business performance drivers which could be strengthened by
implementing the QMS. Two additional questions were used for assessing overall IA
impact on the achievement of the business objectives. A five-point Likert scale was
used in the assessment of either positive or negative effects (1 completely disagree; 3
neutral; 5 completely agree), and the possibility I do not know was added to the
questions.
Arithmetical mean (M) and standard deviation (SD) of the answer values (AV) for
each of the questioned groups of employees are presented in the tables. In Tables I and
II superscript a is used to show values above 4 and superscript b for values
between 3 and 4. In other tables superscript a are used for values above 3 and
superscript b for lower ones. In accordance with the above four hypotheses (H1-H4)
we assumed that results of the survey would show that IA had some positive effects on
managing the company. We therefore expected that the results of the assessments
presented in Tables I-VII would be significantly bigger than 3 (at a 0:05), as result 3
represents a neutral assessment of the IA benefits or its contribution. When testing the
hypotheses we also tested the cut-off point for which the level of support by different
respondent groups was significant. For the statistical test of the hypotheses a t-test
was used. Hypotheses were tested based on four samples of data (auditors, audited
operational managers, middle managers and overall results for the three groups).
5. Results and discussion
This section presents empirical tests for the four hypotheses based on the case study
results.
Results of surveying the three groups of Mercator employees show strong support
for our claim in hypothesis H1 (see Table III). Based on responses from operational and
middle management we could reject the null hypothesis H10 claiming that IA was not
a control mechanism stimulating workers to do their job well. Auditors did not give
significant support for the H1 claim which, however, was not surprising as they had no
direct insight into any changes to work practices resulting from IA. For example, they
were not directly informed about implementation of corrective measures following the
IA findings.
Results of the empirical study in Mercator provide strong support for our claim
made in hypothesis H2 (see Table IV). Based on responses from auditors and audited
operational management we could reject the null hypothesis H20 claiming that IA does
not contribute to knowledge management in the company. As the results show,
operational management gave the strongest support to hypothesis H2 (significantly
above 4.00). Auditors did not value their contribution so highly, probably because they
Internal audit
289
Table I.
Results of testing H4A
Agreement with the statement:

Internal audits contribute to
achievement of the companys
business objectives and thus to
the business efficiency: AV .
L0 (L0 3).
SD
Statistical test
n
L0
t
3.89 0.89 0.05 36 3.60 points 1.9535 0.0294
Auditees/operational
managers
4.39 0.72 0.05 31 4.15 points 1.8452 0.0374
Middle managers
3.60 0.84 0.05 10 3.10 points 1.8750 0.0468
All three groups
3.96 0.86 0.05 77 3.80 points 1.7284 0.0440
Auditors
Note: a Is used to show values above 4; AV answer values
H4A-3
H4A-4
H4A-2
H4A-1
Hypothesis about survey results

Assumption
Target group
H4A-20 rejected
H4A-30 rejected
H4A-40 rejected
H4A-10 rejected
Rejecting the null

hypothesis
290
Test
AV . 4.15a
AV . 3.10a
AV . 3.80a
AV . 3.60a
Conclusion
TQM
23,3
2.66
2.03
2.75
Deteriorates relationships between

auditors and audited personnel
Creates costs of preparing and

implementing IA
1.29
1.03
1.16
Auditors
M
SD
Introduces obstacles to work process

execution during the time of the audit
Note: Is used to show values between 3 and 4
4c
3d
2e
Statements from the questionnaire about the impact of IA on

achievement of business objectives
Statement mark
Negative effects of IA
2.34
1.93
2.87
1.20
1.36
1.20
Auditees/
operational
managers
M
SD
2.67
1.70
3.40b
1.22
0.95
0.97
Middle
managers
M
SD
1.18
1.15
1.27
2.97
1.89
2.59
All three
groups
M
SD
Internal audit
291
Table II.
Survey results on
negative effects of IA on
achievement of the
companys objectives
Table III.
Results of testing H1
Agreement with the statement:

Internal audits are a control
mechanism stimulating
workers to do their job well.
AV . L0 (L0 3).
Auditors
managers
Middle managers
All three groups
Rejecting the null

hypothesis
Conclusion
AV . 3.85a
AV . 4.30a
AV . 3.65a
Statistical test
n
L0
4.22 1.20 0.05 36 3.85 points 1.8644 0.0353 H1-20 rejected

AV . 2.95b
SD
3.32 1.29 0.05 37 3.00 points 1.5267 0.0678 H1-10 not rejected
Note: a Is used to show values above 3; b is used to show values lower than 3; AV answer values
H1-3
H1-4
H1-1
H1-2

Assumption
Target group
292
Test
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23,3
Agreement with the

statement: Internal
audits represent a
means to exchange
knowledge and spread
good practices. AV .
L0 (L0 3).
Statistical test
N
L0
t
4.24 0.76 0.05 37 4.00 points 1.9460

3.25 1.14 0.05 12 3.00 points 0.7609
3.73 1.07 0.05 88 3.50 points 1.9940
managers
Middle managers
All three groups
SD
3.38 1.11 0.05 39 3.05 points 1.8744
Auditors

Assumption
Target group
H2-3
H2-4
H2-2
H2-1
Test
0.0297
0.2314
0.0246
0.0343
AV . 3.05a
AV . 4.00a
AV . 2.65b
AV . 3.50a
H2-20 rejected
H2-30 Not rejected
H2-40 rejected
Conclusion
H2-10 rejected
Rejecting the null

hypothesis
Internal audit
293
Table IV.
Table V.
Agreement with the

statement: internal audits
represent a means to
stimulate business
improvements. AV . L0
(L0 3).
managers
Middle managers
All three groups
Auditors
SD
Statistical test
n
L0
t
4.68 0.57 0.05 38 4.50 points 1.9767 0.0278

3.25 1.06 0.05 12 3.00 points 0.8207 0.2146
4.02 1.05 0.05 92 3.80 points 2.0293 0.0227
3.64 1.06 0.05 42 3.35 points 1.7988 0.0397
H3-3
H3-4
H3-2
H3-1

Assumption
Target group
AV . 3.35a
Conclusion
H3-20 rejected
AV . 4.50a
H3-30 not rejected AV . 2.70b
H3-40 rejected
AV . 3.80a
H3-10 rejected
Rejecting the null

hypothesis
294
Test
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23,3
Communication with customers

Products and services mix
Quality of goods and services
Meeting regulations requirements
Visibility and clearness of work procedures
Work organisation and work conditions
Decrease in work interruptions and deficiencies and their improved
management
Worker productivity
Skills of workers and sharing of good practices
Communication and relations among employees
Stimulus for improvements
Decrease in actual and potential business damage resulting from
inappropriately implemented activities that were discovered in the IA
Savings resulting from proposed improvements
Note: a Is used to show values above 3; b is used to show values lower than 3
4b
2d
3a
3b
3c
4a
1a
1b
1c
1d
2a
2b
2c
Statements from the questionnaire about the impact of IA on achievement of

business objectives
Statement
Positive effects of IA
mark
IA improves
1.07
0.96
1.07
0.95
0.84
0.74
0.83
0.96
0.93
0.79
0.85
0.82
1.07
3.30a
3.58a
3.82a
4.03b
3.92a
3.62a
3.80a
3.24a
3.80a
3.45a
3.65a
3.90a
3.57a
Auditors
M
SD
3.72a
3.63a
4.00b
3.80a
4.16b
4.03b
4.23b
3.97a
4.10b
4.27b
4.34b
4.17b
4.16b
0.96
1.03
0.98
1.10
0.69
0.84
0.72
1.03
0.99
0.83
0.81
0.83
0.93
Auditees/
operational
managers
M
SD
3.40a
3.30a
3.60a
3.20a
3.90a
3.50a
3.30a
3.00a
3.11a
3.25a
3.50a
3.70a
3.70a
1.26
1.27
1.26
1.11
0.94
1.00
1.01
1.16
0.89
0.99
1.00
1.26
1.23
3.42a
3.60a
3.78a
3.96a
3.93a
3.83a
3.80a
3.41a
3.95a
3.66a
3.72a
3.67a
3.50a
0.97
1.23
0.74
0.85
1.16
1.26
0.95
All 3 groups
M
SD
1.22
1.17
1.04
1.08
1.16
1.06
Middle
managers
M
SD
Internal audit
295
Table VI.
Survey results on positive
effects of IA on
achievement of the
companys objectives
Table VII.
Results of testing H4B
Statistical test
N
L0
t
4.42 0.62 0.05 31 4.20 points 1.9685 0.0292

3.80 0.63 0.05 10 3.40 points 2.0000 0.0408
4.12 0.83 0.05 77 3.95 points 1.8429 0.0346
managers
Middle managers
All three groups
SD
4.14 0.99 0.05 36 3.85 points 1.7508 0.0444
Auditors
Note: bIs used to show values lower than 3; AV answer values
H4B-1 Agreement with the

statement: Internal audits
H4B-2 have more positive than
negative effects on the
H4B-3 business performance: AV
H4B-4 . L0 (L0 3).

Assumption
Target group
H4B-20 rejected
H4B-30 rejected
H4B-40 rejected
H4B-10 rejected
Rejecting the null

hypothesis
296
Test
AV . 4.20b
AV . 3.40b
AV . 3.95b
AV . 3.85b
Conclusion
TQM
23,3
did not work in the same environment and did not notice all the problems which had
been solved in response to their suggestions after their visit. Middle managers did not
give significant support for the H2 claim, however this can be explained. It is possible
that they did not see the auditors complete contribution because such knowledge
transfer was not officially reported in an IA report. So we can conclude that IA
significantly contributed to the exchange of knowledge and to the spread of good
practices in the company.
Empirical research in Mercator offers strong support for our claim made in
hypothesis H3 (see Table V). Values of the answers of the three groups of employees
were related to each other in the same way as in the previous case (H2 claim). The
reasons for the lower support given by middle management might be the same as in
case of the H2 test.
The results also showed strong support for hypothesis H4. This support was
confirmed by testing hypothesis H4A (Table I) claiming that IA contributed to
achievement of business objectives and thus to business efficiency.
We were also interested in more structured contribution of IA to business goals and
therefore we identified different goals for all four groups of strategic objectives (see
Figure 1): objectives from customer perspective 1; from perspective of internal
processes 2; from learning and development perspective 3; and from financial
perspective 4 (Kaplan and Norton, 1996). The respondents assessments of
contribution of IA to achievement of all specific strategic business objectives yielded
high results (above 3.00) for all three respondents groups (Table VI).
Survey of Mercator also tested possible negative effects of IA on the achievement of
business objectives (see Table II). As Table II shows, IA did not introduce considerable
obstacles to the business (mean values below 3.00). The highest assessed negative
effects were the interruptions and obstacles that IA introduces to the work process (a
mean value of all three groups close to 3.00). If time of the audit meeting was not
planned considering normal process execution such negative effects might appear.
Costs of conducting IA and IAs negative effects on interpersonal relationships were
not regarded as a real problem.
The overall impact of IA on business performance was assessed by testing
hypothesis H4B (Table VII) claiming that IA had more positive than negative effects
on the business performance. All three groups provided strong support for this claim
(with mean values for each group of respondents above 3.80). These assessments
offered additional support for hypothesis H4.
6. Conclusion
Our research thesis was that in companies that are internally motivated to implement
ISO 9000 QMS and which have developed a mature quality culture and mature QMS,
the IA can be used as a helpful and beneficial management tool. Paper shows that in
order to use IA as an effective managerial tool leading to achievement of different
possible business benefits, IA has to be appropriately integrated within strategic
management system through assurance of appropriate role of the QMS in the
company.
Four groups of benefits were realised, analytically proved by evidence from
previous research and supported by the results of the Mercator case study. Results
show that mean values of all assessments were above the limit value of 3.00 (the
Internal audit
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TQM
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298
neutral value). These results and the statistical tests presented above show that the IA
in Mercator was a useful managerial tool helping managers to improve the business
performance. In this way, the case of Mercator supports H1-H4 claiming the positive
effects of using an IA as a managerial tool.
The strongest support for the expected benefits of IA was given by operational
managers who supported all four hypotheses. Operational managers were directly
involved in the audit process and in the follow-up activities. They knew IA effects best
because they came directly in touch with them in their work environment. This gives
additional support for our claim that an IA should be used as a managerial tool. We
also tested empirical support for the possible negative effects of IA on business
performance, but no significant support was found.
Managers can stimulate the effective conducting of an IA resulting in IA impacting
positively on business performance in several ways, especially by giving full support
to the QMS and IA and by integrating them into strategic management of the
company. Managers should understand the essence of the QMS and IA, express their
expectations about them and stimulate their effective performance and training in
QMS and IA topics. They should stimulate internal auditors to take on the role of an
auditor, support their training and development, enable the auditors good working
conditions, maintain professional and correct relations with them and acknowledging
their good work. Therefore, it is vital that they treat IA results seriously. They should
consistently and constructively respond and act on the findings and check the results
of IA follow-up actions.
Paper developed a framework for testing benefits of the IA for management in those
companies that have developed a mature QMS. Testing on a single case has limitations
regarding the ability to generalise results to a broader spectrum of companies. Case
studies are generalisable to theoretical propositions and not to populations (Yin, 2003a,
p. 10). However, with the confirmed hypotheses about benefits of IA as a managerial
tool in the case of the company Mercator, statistical generalisation of H1-H4 by using
the survey method represents a logical additional step.
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About the authors

Milena Alic is a Quality Manager in a retail company Mercator, d.d. She has several years of
practical experiences in this field of work. In the company, some of her tasks are managing
internal audits and auditor training according to international quality standards. She works as
an auditor of the ISO 9000 systems for a Slovenian certification body, too. Dr Alic received the
MSci and PhD degrees from University of Ljubljana. This paper is based on her doctoral research
which was the winner of the 2008 Emerald/EFMD outstanding doctoral research award
competition.
Borut Rusjan received the MSci and PhD degrees from University of Ljubljana. Dr Rusjan is
Associate Professor in Operations Management. His research interest focus is on operations
strategy, and application of quality management systems (ISO 9000) and business excellence
models (EFQM model). Dr Rusjan has published over ten papers in refereed journals including:
Total Quality Management & Business Excellence, International Journal of Operations &
Production Management and European Journal of Operational Research. He is a member of the
editorial review board of Quality Management Journal. Borut Rusjan is the corresponding author
and can be contacted at: borut.rusjan@ef.uni-lj.si
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