**1. Introduction**

A quality management system (QMS) involves a collection of business processes that consistently meet customer requirements and enhance customer satisfaction. It is aligned with an organisation's purpose and strategic direction [1]. Other commonly used quality standards such as ISO 9001/South African National Standards (SANS) 9001 provide requirements to be complied with to effectively implement a quality management system (QMS). In order to contextualise the relevance of the

three mainly used concepts and their interrelation to the study, they were defined as follows: firstly, the QMS, which has been defined above. Secondly, total quality management (TQM) is defined as 'an integrative firm widespread management philosophy aimed at continuously improving the quality of the processes, products and services by focusing on meeting or exceeding customer expectation to enhance customer satisfaction and organisational performance' [2].

Scholars in management studies alluded to quality standards as documents that provide requirements, specifications, guidelines or characteristics that can be used consistently to ensure that materials, products, processes and services fit their purpose [3].

Products that do not meet relevant quality standards are less marketable because of their inability to compete globally, thus impacting negatively business growth and expansion. The development programmes spearheaded by the government to ensure products and services are more competitive are not continuously monitored effectively to achieve the intended objectives. This challenge usually 'results in the duplication of efforts and hampers the development of the monitoring and evaluation framework for assessing the success of SMME programs' ([4], p. 9). The food industry is highly regulated. Therefore specific minimum hygienic and safety requirements are enforced. Nonadherence leads to severe repercussions. In the article, Top Performing Companies and Public Sector ([5], para.9 Line 4), the 2015 survey findings on the challenges faced by small, medium and micro-sized enterprises (SMMEs) are listed, of which 40% of them were due to burdensome regulations.

Neyestani [6] notes continuous improvement of the business quality performance based on establishing a proper system for leading the whole organisation effectively to meet customer requirements. Other research findings state that TQM results in an increasingly competitive advantage for firms. Thus, 'TQM is considered a cause of competitive advantage because it lets firms operate at a more competitive level and fulfil the needs of its consumers while minimising production costs and wastes, hence increasing the quality of the end product' ([7], p. 54). Similarly, Đorđević *et al*. ([8], p. 22) asserted that business excellence is possible to realise in two ways: by applying the concept of TQM. In concurrence with the assertions made by the different scholars mentioned above, it can be concluded that the hypothesis that correlates a positive relationship between the application of quality standards and business excellence is true. This chapter is based on the study conducted to assess the impact of quality standards in any business, whether in the manufacturing or service rendering sector and regardless of the size and complexity of the organisation. The following section will discuss the problem statement, review literature, expand on the research methodology and procedures, analyse data and elaborate on policy implications and conclusions and recommendations.

### **2. Problem statement**

While the informal economy within the eThekwini Metropolitan area contributes to the city's development and social life, the SMMEs face diverse challenges that impact their growth and sustainability ([9], p. 1). According to Durban's Informal Economic Policy [10], 'both formal and informal economies make up the city's economy; however, SMMEs face impediments that emanate from the socio-economic and structural factors, which compel them to be exposed red tapes, noncompliance to regulations'. The author works very close with SMMEs as, based on the observations, it has been noted that most are faced with a cumbersome and expensive process of essential trading permits and licences acquisition. The article,

*The Impact of Quality Standards on the Business Performance of Small, Medium… DOI: http://dx.doi.org/10.5772/intechopen.101366*

Top Performing Companies and Public Sector ([5], para.9 Line 6), notes that topperforming companies that amount to a total of 40% are challenged by the burdensome regulations that remain the impediments that are mostly facing SMMEs that end up stagnating their businesses.

The Small Enterprise Development Agency (SEDA) Report ([11], 18:28) also notes the challenges of noncompliance by South African SMMEs, and they continue to impact their business's success negatively. 'The heightened rate of informal business in the SMME sector due to higher unemployment needs to be addressed through focusing on reducing barriers to market entry, the regulatory burdens, easing labour relations and stepping up labour skills initiatives' ([11], 18:28). According to research findings by Van Scheers [12], among other challenges faced by SMMEs that are market-related include trading of products and services that do not meet some quality standards and regulatory and statutory requirements to put them at a better competitive advantage. This study intends to respond to the aim and the following primary question.
