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Quality in Greece, as a key attribute of excellence, has deep roots and a long history. As such it helped create the Greco‐Roman civilization, which revived during the Renaissance and formed the foundation of modern civilization in the West. After an extended period of foreign occupation, Greece for the last 150 years faced the challenges of survival and building the infrastructure of a new state. Following the Second World War we observe a gradual restoring of the importance of quality in the country’s cultural and economic life. Becoming a member of the European Union has provided a strong stimulus for serious efforts to improve the quality of products and services. Most initiatives have been undertaken by associations of business firms and technical professionals, and by universities providing training of managers in the principles of total quality management. More recently, significant efforts were initiated by the government. Future success will depend on the political will to implement European and national policies to support important quality initiatives, such as the National Quality Award, a National Quality Council and other quality‐related activities.

This work sets out to explore the effects of ISO 9001 on productive efficiency of firms.

A sample of 1,572 firms from three Greek manufacturing industries is used for empirical work. The firms are from the food and beverages industries, the machineries industries as well as from the electrical and electronics appliances manufacturing industries and include both adopters and non‐adopters of ISO 9001. A stochastic frontier methodological approach is adopted and the effects of ISO 9001 can be modeled in four ways: as a managerial input alongside the conventional inputs of capital and labor, as a factor affecting technical inefficiency, as an input and a factor affecting technical inefficiency and as having no effect at all.

ISO 9001 operates as a factor affecting technical inefficiency with non‐neutral effects on capital and labor. The combined effect of ISO 9001 with capital increases the level of technical inefficiency reflecting adjustment costs incurred when ISO 9001 is adopted. The combined effect of ISO 9001 with labor decreases the level of technical inefficiency reflecting the positive result of ISO 9001 on reducing x‐inefficiency.

The analysis isolates the effects of ISO 9001 on capital and labor but specific case studies are necessary in order to reveal managerial best practices that confront negative and support positive effects of ISO 9001 adoption within firms.

The paper illustrates that ISO 9001 is a managerial factor reducing productive inefficiency.