Research Of Certification Validity Based On The Behavoires Of Micro-Stockholders

Certification and accreditation originates from the needs of promoting smooth transaction among traders in a commercial society. Certification contributes most in reducing information risks for traders, in reducing transaction costs by providing trust in quality and service, which helps realize the effective allocation of econimic resources. Currently, as market economy is growing more mature and globalized, certification scheme, as a third party system, is playing an important role in ensuring life safety and health, sustainable development of environment, and effective use and allocation of resources. However, while helping achieve better balance of information, certification also bears serious imbalance of informtaiton within itself. If certification fails to provide independent and impartial proof, it will make the imbalance of information among traders more serious, and thus renders certification itself invalid. And it's better to have no system than to have an invalid system.The validity of certification is the lifeline of certification, and poor validity is the main problem facing certification. Currently, some consultancy agencies control enterprises and coerce certification bodies by providing both consultancy and certification. The enterprises do not clearly understand the purpose of certification, and apply for certification only for a certificate. Some even buy certificates. In voluntary certification, some certification bodies compete by lower prices, and as soon as they win the contract, they will use some shoddy practice to reduce the cost. Such practice sacrifices the validity of certification, the integrity and reputation of certification industry. All these call for a need for the improvement and innovation of the certification system. However the innovation and improvement of the system must be based on the behaviour of micro stakeholders as well as their philosophy, thoughts and related affecting factors.This thesis,based on an analysis framework of information economics takes account of the background of China certification and accreditation. It focuses on the market behaviour of micro stakeholders, and has an in-depth analysis of the behaviours of three types of micro stakeholders-consumers, enterprices and certification bodies, based on an extensive survey result and in-depth interviews. The research is mainly on the consumers'attitude, paying behaviour and willness to pay, the motivation of enterprises for voluntary involvement in certification, and the price structure and price competition of certification bodies. The result will be some regulatory recommendations based on the interaction of the different stakeholders. The main contents and conclusions are as follows.(1) When certification has come into the various fields of national economy and when a big amount of products are under certification, based on the conclusion of entensive sample data,the thesis reveals that the awareness and recognition of the public relating to certification is still very low.Besides,consumer of different social economic features and poupulation features do not generate systematic differences in awareness and recognition of certification. This means that the concept of certification needs to be spread more widely among the public. The analysis also shows that to raise such awareness and recognition will help consumers have a more positive view of certification, and the media could play a big role in such a process. Consumers who pay more attention to production process, who are exposed to media more frequently, who have higher income and who give more attention and trust to certification, have a higher willingness to pay for certification.Such research results indicate that the government should put on its daily agenda the certification promotion and certification education to the public. It should work with the media, like TV, to raise the awareness of the consumers on certification. Through regular survey on the consumers'attitude and trust on certification, the government should review its work focus. On the other hand, the government should encourage people with advanced consumption concepts to play a pioneer role. All these efforts will contribute to the growth of certification.(2) Based on the theoretical framwork of the stakeholders, the thesis analyses the motiviation of enterprises for certification. Although China has the largest number of certified enterprises, it is still far behind Europe in term of percentage of certified enterprises Vs total number of enterprises. Thus there is still a large room for the certification to grow in China. Theoretical analysis shows that for the social welfare maximization, the growth of certification mainly depends on the voluntary certification by enterprises. The case studies show that Chinese enterprises are mainly driven for certification by economic benefits, and seldom motivated by environmental protection and staff health. Some enterprises more easily apply for certification for the pursuit of manufacturer reputation. Specifically, those private enterprises who have a higher self-recognition more easily apply for certification. Those enterprises who have a longer history and larger scale, who are stakholding companies or corporate companies more easily apply for certification. Enterprises who are association members, or who are audited more easily go for certification. Agriculture, manufacturing and construction industries enjoy high rate of certification while other industries have a remarkably low rate of certification. Attention from the management of enterprises, as well as manufacturer culture are key factors affecting the effectiveness of certification.(3) The thesis researches on the structure and certification market and the price behaviour of the certification bodies. It reveals that the market concentration of the main three types of system certification now stays basically stable, following a rapid decrease. Fiece price competion results in continuous decreasing of certification prices. Due to the conversion cost in starting new business, the operating practioners enjoys cost advantage over new comers. To acquire expected revenues, the certification bodies will use low price, sometimes lower than the cost, in bidding in order to win the contract. No matter the certification prices deviates either higher or lower from the benchmark price,it will damage the validty of certification. The key to raise the validity of certification is to establish limited competion mechanism in the certification market.Based on the above research results, the thesis proposes the following supervision recommendations. Firstly, deficiencies on the system itself(such as absence of consumers, the "father and son" relationship with government authorities, etc) behind some phenomenal irregularities (such as vicious price competition, combination of consultancy and certification, etc) are the leading causes damaging validity of certification.The certification market mechanism will be further twisted by simply imposing on restrictions on certification charge. We should focus our efforts more on establishing a mechanism in which the micro stakeholder could be motivating and compatible with each other, while at the same time supervising each other. Secondly, certification is an industry heavily relying on the trust from the public, and it could set up a long-term effective mechanism only when it serves truly the interests of the consumers. Thirdly, it's hard to form real responsibility affixation mechanism on the certification body as a whole, in reality, the main player for low validity of certification is individual.Therefore, the supervision of certification should be comprehensive, including both fhe certification bodie and inspectors. A life long credit follow-up mechanism should be eventually formed and the responsibilities of individuals should be strengthened.