-
International Journal of Productivity and Performance
ManagementAn application of interpretative structural modeling of
the compliance to foodstandardsSilpa Sagheer and Surendra S. Yadav
S.G. Deshmukh
Article information:To cite this document:Silpa Sagheer and
Surendra S. Yadav S.G. Deshmukh, (2009),"An application of
interpretative structuralmodeling of the compliance to food
standards", International Journal of Productivity and
PerformanceManagement, Vol. 58 Iss 2 pp. 136 - 159Permanent link to
this document:http://dx.doi.org/10.1108/17410400910928734
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Process (ANP)",International Journal of Productivity and
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http://dx.doi.org/10.1108/17410400710717073Jitesh Thakkar, Arun
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(ISM) of IT-enablersfor Indian manufacturing SMEs", Information
Management & Computer Security, Vol. 16 Iss 2 pp.113-136
http://dx.doi.org/10.1108/09685220810879609Singh, Ravi Shankar,
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An application of interpretativestructural modeling of the
compliance to food standardsSilpa Sagheer and Surendra S.
Yadav
Department of Management Studies, Indian Institute of Technology
(IIT) Delhi, New Delhi, India, and
S.G. DeshmukhDepartment of Mechanical Engineering, Indian
Institute of Technology (IIT)
Delhi, New Delhi, India
Abstract
Purpose The aim of this paper is to identify and analyze
critical factors/elements influencingstandards compliance and their
level of influence in a developing country food industry, with
specificreference to India.
Design/methodology/approach A total of 13 critical elements were
identified and structuredusing pair-wise comparisons. Structural
and reachability matrices were formed and iterated to yieldlevels
of hierarchical influence of each element. MICMAC analysis was also
performed to determinedependency and driving power of these
elements.
Findings The analysis brought out a compelling need for
sensitive and responsive action bydeveloping country governments
while competing globally. Food industries in developing
countriestend to detour while complying with standards, owing to
costs involved in setting up systems andprocedures. While a strong
surveillance mechanism is the high point of a good compliant system
thishas to be preceded by supporting measures such as linking of
domestic and international markets,consolidation of institutional
structures, strengthening of legal/regulatory systems, etc.
Practical implications Use of interpretative structural modeling
(ISM) is inspired by theversatility displayed by this method, as
reported by researchers, across a wide spectrum of economicand
competitive complexities affecting businesses.
Originality/value The study is a hitherto unexplored attempt,
using interpretative structuralmodeling, to analyze standards
compliance in a developing countrys food industry.
Keywords Structural analysis, Standards, Standards
organizations, Food industry,Developing countries, India
Paper type Research paper
IntroductionPerformance of a system is dependent on a set of
critical factors that act as enablers orinhibitors upon it. To
function successfully, enablers have to be promoted andfacilitated,
while inhibitors have to be eliminated or rehabilitated.
Researchers fromIndia have been widely applying interpretative
structural modeling (ISM) as a tool tounderstand the relationship
between these critical enablers and disablers in SupplyChain
Management (Mandal and Deshmukh, 1993; Jharkaria and Shankar, 2004,
2005;Ravi and Shankar, 2004; Ravi et al., 2005; Faisal et al.,
2006; Thakkar et al., 2007). Thistool offers wider application
possibilities and one such area of research is safety andquality
systems.
The current issue and full text archive of this journal is
available at
www.emeraldinsight.com/1741-0401.htm
IJPPM58,2
136
Received September 2007Revised December 2007April 2008Accepted
May 2008
International Journal of Productivityand Performance
ManagementVol. 58 No. 2, 2009pp. 136-159q Emerald Group Publishing
Limited1741-0401DOI 10.1108/17410400910928734
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Quality and performance of global agrifood business today is
heavily influenced bystandards and regulatory regimes. It is
dependent on national policy frameworks ofgovernments, quality and
safety regulatory systems, compliance to rules and standardsetc.
(Sagheer et al., 2006). While a regulatory framework commands
automaticcompliance, systems in developing countries have shown
lapses. Although their exportchannels display certain amount of
orientation towards compliance, domestic channelslag behind. The
challenge to maintain safety and quality is high, as it has
graveimplications for global food trade. Food standard compliance,
thus has become, one ofthe most debated and indulged topics in
world trade forums (Wilson and Otsuki, 2001).
This paper aims to apply Interpretative Structural Modeling
(ISM) and determinethe hierarchical and contextual relationships
between factors influencing foodstandards compliance in a
developing country. India specific examples are drawn out,to relate
to Indian scenario. Major objectives of the paper can be summed up
as:
. to identify elements enabling system standards compliance in a
developingcountry food industry;
. to rank the identified elements;
. to map relationship between these elements; and
. to highlight relevance of the output.
The paper is organized into five sections. First segment is an
introduction withobjectives of the paper. Section two explains
Interpretative Structural Modeling (ISM),its purpose and
contributions to literature. Section three lists in detail, steps
inapplication of ISM. Section four consists of discussions and
observations and sectionfive, the last section is concluding
remarks and policy implications.
Interpretative structural modeling (ISM) application and
relevance to thecontextInterpretative structural modeling (ISM) is
a computer assisted process, first proposedby J. Warfield in 1973.
This systematic application of elementary notions of graphtheory
exploits theoretical, conceptual, and computational leverage, and
constructs adirected graph or network representation of complex
patterns of contextualrelationship among a set of elements. The
process is one-to-one correspondence,between binary matrix and
graphical representations of directed network. From binarymatrix,
an iterative process extracts levels of relationship of each
element in hierarchy.Fundamental concepts of ISM are element set
and contextual relationship (Malone,1975). It is used by
individuals and groups to understand complex situations and
putstogether a course of action for solving problems. This tool is
chosen to model criticalelements influencing standards compliance,
considering its capability to map complexrelationships between
them.
ISM is used in complex situations, where the user concentrates
on hisunderstanding of the elements involved, to make subjective
judgments on existingor absent relationships between each pair of
elements (Malone, 1975). Sage (1977)explains it as a process
transforming unclear, poorly articulated mental models ofsystems
into well defined models useful for many purposes.
Janes (1988) comprehending the whole process of ISM, explained
the interrelationsbetween issue, group and methodology and between
content, context, process andproduct. Floods (1989) investigation
of future scenario systems for problem solving
Interpretativestructuralmodeling
137
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explored methodologies that classify the system into
two-dimensional grids. Hefound ISM a befitting open system, with an
affinity for consensus as individualsare involved. The method
recognizes the relevance of systems age as against themachine age,
where problem solving means dealing with systems filled with
people,are open, have purposeful parts and requires an approach
that is holistic. ISMscapability to connect with cognitive levels
of those involved in complex situations ispronounced and has been
recorded by Bolanos et al. (2005).
A review of literature from India since 1990 reveals wide
application of ISM onproductivity enhancement issues. In most
cases, it is used to determine the influence ofenablers or
inhibitors on a system as well as to examine their interweaving
relationships.
Thakkar et al. (2007) used ISM along with other tools like
cause-effect diagram andAnalytical Hierarchical Process (AHP) to
develop a Balanced Score Card usingquantitative and qualitative
approaches. Faisal et al. (2006) explored effective supplychain
risk mitigation and used ISM to understand dynamics between various
enablersthat mitigate risk in a supply chain. Jharkaria and Shankar
(2005) used ISM toscrutinize barriers in information technology
application to supply chain management.Ravi et al. (2005) found ISM
practicable in determining key reverse logistic variableswhich the
management should focus on to improve productivity and performance
ofcomputer hardware supply chains. Ravi and Shankar (2004) merit
ISMs capability toexplore mutual influences of elements and their
roles in accelerating or deceleratingperformances of other
elements. They applied this tool to analyze interactions
amongbarriers of reverse logistics in a supply chain.
ISM has also been deployed in contexts as diverse as education
program planning(Hawthorne and Sage, 1975), cross-cultural
interactions (Jedlicka and Meyer, 1980),energy conservation in
cement industry (Saxena et al., 1992), to information
systemeffectiveness (Kanungo et al., 1999), to designs for product
families based on marketrequirements (Hsiao and Liu, 2004).
Compilation of literature reviewed (Table I) brings out the
versatility of ISM as atool capable of tackling myriad range of
complex issues. The application bringsstructural clarity and
establishes hierarchical order for prioritization and
consequentaction. It is in this background that the paper attempts
to analyze dynamics ofinter-relationships between critical elements
enabling food standards compliance.
Applying interpretative structural modeling (ISM)Interpretative
structural modeling can be applied by following certain steps.
These canbe listed as:
(1) Define the background/problem.
(2) Identify elements.
(3) Pairwise comparison of elements using ISM software and
generatingreachability matrix.
(4) MICMAC Analysis using dependency and driver power of
elements inreachability matrix as co-ordinates.
(5) Partition reachability matrix.
(6) Form lower triangular matrix/conical matrix.
(7) Develop the digraph.
IJPPM58,2
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Table I.Compilation of literature
reviewed in interpretativestructural modeling (ISM)
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Defining the background/problemThe Oxford Dictionary defines a
Standard as: a required or agreed level of quality orattainment;
and something used as a measure, norm, or model in
comparativeevaluations. British Standards Institution (BSI) defines
a standard as a publishedspecification that establishes a common
language, and contains a technicalspecification or other precise
criteria and is designed to be used consistently, as arule, a
guideline, or a definition. International Organization of Standards
(ISO)explains that international standards provide a reference
framework, or a commontechnological language, between suppliers and
their customers which facilitatestrade and transfer of
technology.
The Codex Alimentarius, Organization of International Epizootics
(OIE) andInternational Plant Protection Committee (IPPC) are the
three apex standard settingbodies in the global agrifood trade.
Each one deals with food, animal health and planthealth
respectively. In this paper, as discussions are on food standards
compliance,references are mainly to Codex Alimentarius. This body
was jointly set up by the Foodand Agriculture Organization (FAO)
and the World Health Organization (WHO) in1961. Codex Standards
have become de facto international standard in global foodtrade and
a benchmark for national food safety legislation. From developing
countriesviewpoints, compliance with Codex Standards means greater
care in assuring thesafety of their food exports and improved
access to export markets, especially indeveloped countries.
Despite the existence of Codex Alimentarius, many developed
countries maintainstringent parameters than Codex. They have
consistently upgraded their standards,particularly for imports, by
installing new institutions, methods and standards toregulate food
safety and hazard control. This has resulted in measures that
accentuatecompliance issues. Standards are raised each time to next
higher levels, in many cases,making it difficult for developing
countries to cope with (Mehta, 2003; George, 2003).
Private standards. Private standards are developed by specific
retailers, especiallythose with multinational nature. These
standards combine food safety with certainamount of environmental
health and workers safety and health requirements. Fulponi(2006)
identified three major trends in emergence of private standards,
these being:
(1) a shift to voluntary management systems;
(2) formation of coalitions to set-up private standards; and
(3) increased application of private standards in international
businesses.
Berdegue et al. (2005) cited the near absence of public food
safety and quality standardsand their ineffective implementation as
reason behind emergence of these privatestandards.
Unnevehr and Jensen (1999) traced history of Hazard and Critical
Control Points(HACCP) one of the earliest implemented private
standards that gained acceptancein mid-nineties in Europe and North
America and later in developing countries. Withthe waves of
supermarket diffusions hitting developing countries of Central
andLatin America, Africa and Asia, the agrifood industry has seen a
spate of privatestandards (Reardon, 2006). Leading supermarket
chains in Central America areimposing private standards on their
suppliers to raise product quality, ensureconsistency and to
differentiate their products from those of traditional
retailers(Berdegue et al., 2005).
Interpretativestructuralmodeling
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The domestic regulatory scenario in India. The Bureau of Indian
Standards (BIS) isthe main body entrusted with the framing of
domestic food regulations in India. Whiletheir standards are
voluntary, they play a guiding role for government
agenciesformulating mandatory standards. Indian food regulations
present a complex regimeand are cumbersome to manage for the
enforcement authorities. Overall, sevendifferent ministries deal
with food industry often causing duplicity and
overlappinglegislation (Mehta and George, 2004). At the farm level,
there is very little regulatorycontrol in domestic production
system. The Food Safety and Standards Act FSA(2007), has proposed
the establishment of a new authority called the Food Safety
andStandards Authority, the reorganization of scientific support
pertaining to the foodchain through the establishment of an
independent risk assessment body, a new foodlaw, merging more than
ten separate Acts and clarification of responsibilities of
therelevant ministries.
ISM can be helpful in understanding standards compliance problem
explained here.The tool can manage an in-depth scenario assessment
by examining theinterrelationships between its elements.
Identification of elements enabling standards system
complianceTo identify the elements, there has to be a thorough
understanding of food safety andquality issues faced by developing
countries.
Three tracks were followed to arrive at the critical elements.
These were:
(1) Literature covering food standards compliance issues faced
by developingcountries, their export challenges and cases specific
to Indian scenario werereviewed. Major points emerging out of this
were: increase in the number ofprivate/voluntary standards; lack of
orientation of domestic laws tointernational standards and systems;
absence of coordination betweenmonitoring agencies; and their
subsequent impact on industry performance.
(2) Results from a survey conducted by one of the authors, as
part of anindependent research earlier, to examine the impact of
WTO and Codex onIndian food export industry and its responsiveness
also helped to identifyelements. Out of 250 questionnaires
dispatched to Indian food exportcompanies, 30 valid responses were
received. Fresh and processed fruit andvegetable exporters formed a
major proportion of respondents. Some of thefindings of this survey
were 67 percent of respondents did not have updateson food standard
developments related to their products; 77 percent were notaware of
the dispute settlement mechanisms in WTO, Codex etc, 63
percentagreed that industry responsiveness to international food
standards systemsand procedures were moderate. However, 70 percent
of respondents felt thatgetting updated about international
regulatory systems would be the bestoption to tackle trade
competitiveness issues that they were facing.
(3) An expert panel consisting of five members two each from
government andindustry respectively and one from research was
formed. The two industryexperts were from export and domestic
sectors respectively. Literature on ISMwas circulated, to
familiarize experts with the tool. They were asked to list asmany
ideas as possible and communicate them to authors in a specified
format.
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As a result of following the three tracks, 13 elements were
identified and ISM wasapplied in order to understand their
relationships and impacts at compliance levels.
The 13 elements are:
(1) Develop a strong legal/regulatory system. Athukorala and
Jayasuriya (2003)underlined the need for strong legal or regulatory
mechanisms capable ofenforcing standards compliance. In most
developing countries, while aregulatory framework exists, standard
setting lacks a scientific rationale.Industry responsiveness to
standards is dependent on the degree ofgovernments manageability of
regulatory mechanisms in each country.
(2) Link domestic regulatory framework and performance in
international markets.Competitive results in global trade demand
extensive negotiating power, builtupon a strong domestic regulatory
framework. Contrary to Porters (1990)theory of a highly demanding
domestic market that can trigger betterinternational performance,
there is dichotomy seen in compliance systems ofmost developing
countries. The export channels are better compliant ascompared to
domestic channels in countries such as China, India, Brazil,
Kenya,Chile, etc. (Donovan et al., 2001; Athukorala and Jayasuriya,
2003; Sawhney,2005; Honma, 2006; Okello and Swinton, 2007).
(3) Lower certification costs. The highly prohibitive
certification costs are adeterrent for developing country firms to
adopt certification processes.EurepGAP (European Retailer Parties
Good Agricultural Practices) nowre-christened GLOBALGAP the most
commonly implemented certificationsystem at farm level has proved
to be expensive for average farmer producers.To counter this
practice, developing countries are preparing their own
domesticstandards of Good Agricultural Practices (GAP) and
benchmarking it withEurepGAP and similar standards. This reduces
costs and establishes acustomized certification system for domestic
sector. Except India (where thedraft IndiaGAP document is awaiting
clearance from Ministry of Agriculture),Kenya, Uganda, Tanzania,
Chile, Thailand, Indonesia, Philippines etc. are in theprocess of
completing this exercise (UNCTAD, 2005, 2007).
(4) Increase control over primary production processes.
Exercising control overprimary production systems means a
methodical keeping of culture calendarsspray schedules, etc. at
farm level. Tracking food from the field can reducecontaminants
like microbiological, chemical and pesticide
residues.Implementation of GAP standards is a strategic
intervention to gain controlover primary production processes. GAP
is currently restricted in mostdeveloping countries to only farms
producing for exports. In India, thoughEurepGAP has been introduced
in several farms producing for exports, firmsare concerned that the
system exercises extreme controls over pesticide usage,cropping
patterns, harvest mechanisms, post harvest handling etc.
(5) Consolidate and strengthen institutional structure.
Duplication of regulationsand its administration are constantly
highlighted issues in developingcountries, India being an apt
example of this situation. Objective of the newfood law Food Safety
and Standards Act, 2006 is to unify the system andconsolidate
fragmented institutional structures. Good Agricultural
Practices(GAP) at farm level, Good Manufacturing Practices (GMP),
Good Handling
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Practices (GHP) and Hazard Analysis and Critical Control Points
(HACCP) andsimilar manufacturing certifications require coordinated
controls anddetermination of all institutional partners in
government.
(6) Profile industry structure. The success of developed
countries in ensuringregulatory compliance has a basis in the
organized structure of their agrifoodindustries. Memberships of
industry bodies or associations can be helpful, asplayers are
structured to fit into various tiers of the industry. Law in
mostdeveloped countries mandate entrepreneur registration with
their respectivenational chambers of commerce. This helps in
building a structured profile ofthe industry facilitating faster
system implementations. The unorganizednature of Indian food
industry is a major hindrance in tackling compliance.Producers and
processors with small land holdings and medium and smallprocessing
businesses are not well organized or are not registered members
ofindustry associations and hence do not find proper representation
in policymaking. The majority do not even have an understanding of
the benefits ofjoining an industry association.
(7) Invest in physical infrastructure. Quarantine facilities,
diagnostic laboratoriesand research centres equipped with
sophisticated instruments and similar otherphysical infrastructure
are decisive factors for food safety at operations level. InIndia,
there are specialized government research centers for agrifood
sector.While there are well equipped testing facilities operated in
the private andgovernment sectors, there is need for more of these
facilities to be establishedand existing ones to be upgraded.
State-of-the-art food systems have emerged indeveloped countries,
as a result of consumer interest and attention in the
subject(Beulens et al., 2005). This has helped exporters of
developing countries testresidue levels up to parts per trillion
(ppt) as opposed to parts per million (ppm).Testing equipment and
software capable of integrating the analytical,procedural and
systemic functions that ensure a seamless flow of supplychain and
traceability is a requisite to ensure competitiveness (Veen,
2005).Although this is an expensive exercise, developing countries
in Asia such asChina, Thailand etc. and those in Africa that have
extended their horticulturechains to developed markets, have their
respective governments eithersupporting or driving installation of
such testing infrastructure. In India, exporttesting facilities for
some products and produce of spices and fruits have seenmuch
investment and improvement.
(8) Track international food standards systems. A major role is
accorded to Codexin international food regulatory systems, this
being the basic and generalframework affecting almost any form of
food traded in global markets. CodexCommission presents an
opportunity for all countries to join the internationalcommunity in
formulating and harmonizing food standards and ensuring theirglobal
implementation. Hence, it is crucial for food companies to
trackstandards setting at various stages in Codex. It can also be
the referraldocument for food policy formulation by national
governments. Stakeholders(represented by the farmer-producers,
processors, exporters, government etc)participation is necessary in
representing, debating and finalizing standardsand ensuring
compliance at every level. National government representatives
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attending Codex sessions should be well prepared to defend their
countrysstance. This can be realized only through consistent and
co-ordinatedinteractions between relevant government departments
and other stakeholders.
(9) Develop and maintain resource pool of human capital. The
role of human capitalin agrifood industry operations and the
regulatory framework is spread overstages of standard setting, its
implementation and compliance. These processesprimarily involve
scientists and other technical experts who provide inputs andalso
government officials who represent the regulators. The
scientificcommunity has specialized research centres in the country
and specialistsfrom agriculture, horticulture, food technology,
microbiology and such otherfields. Antle (1996) and Martin et al.
(1999) have made notable contributions todeveloping the strength of
agrifood industry in developed countries. Butdeveloping countries
either exhibit dearth of scientific personnel or are laggardsin
technology progress through research and developments in areas
related tofood science and technology. Agrifood educational
programs at universities indeveloping countries often do not
attract best talents and this has a bearing onavailability of well
trained personnel in the industry. Majority of the small andmedium
farmers and food processors in developing countries including
India,lack focus and understanding of regulatory requirements they
need to fulfill.
(10) Sensitive and responsive government intervention and
support. The significanceof interrelationship between regulatory
activities of government and behaviorof firms has been researched
by Caswell and Johnson, 1991; Henson andHeasman, 1998 etc. But
there is a dearth of similar research in food industry(Henson and
Hooker, 2001). As standard making and implementation aredemanding
procedures, only governments exhibiting sensitiveness
andresponsiveness to domestic and international regulatory
scenarios canbecome competitive. This is further reinforced by the
stringent regulationsimposed by developed countries. Weak
institutional and physical infrastructureand disjointed
administrative controls and multiplicity of laws can
cripplegovernment action and encourage non-compliance. These have
to be addressedto allow reaction and response from the government
in the form of gradedpenalties on an offence committed.
(11) Bridge industry and research academia gaps. Agrifood
business being a sciencebased industry demand technical knowledge,
transfer of technology and accessto well trained personnel and
infrastructure. These services when provided byconsulting companies
in research can be costly for the small and mediumfarmer-producer
or processor in developing countries. Research academiarepresents
an alternative and cost efficient, but vast repository of
scientificknowledge in the industry. One way of capitalizing on
this knowledge forbusiness is to bridge the industry-academia gap
(Etzkowitz and Stevens, 1998).Developed country experiences with
academia interaction have led to theincorporation of successful
business models (Defazio and Garcia-Quevedo,2006). An understanding
of the industry at operational level by academia cangenerate
creative and strategically efficient economic solutions.
(12) Strengthen surveillance systems. Surveillance implies
watchful approach with acontinuous feed of measured performance on
defined parameters of food safety
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by personnel with scientific knowledge. Standards compliance,
especially indeveloping countries can be implemented only with the
aid of strongsurveillance systems (Wilson, 2001; Aloui and Kenny,
2005). This has to besupported by an appropriately structured
feedback mechanism, strategicallymanaged information system,
coordinated interaction between relevantagencies, technically sound
infrastructure, financially empowered resourcesand well trained
manpower. As an integral part of the food safety
framework,surveillance systems in developed countries conduct
surveys on areas likechemical contaminants in food, chemical
contaminants from food contactmaterials, food additives, food
authenticity, microbiological contamination offood, etc. (Lang,
1999). In the UK, a consumer is allowed access to details
ofanalysis and brand names disclosed as a result of open policy
followed by thegovernment (FSA, 2007). As a result of mandatory
export norms brought out byIndias national food export development
authority Agricultural andProcessed Food Export Development
Authority (APEDA) the first successfulcase of complete compliance
to domestic traceability standards, right from thefarmer to the
importer, has been implemented in grape exports to
EuropeanUnion.
(13) Respond to customer/market requirement. Producer/processors
compliance ofstandards is influenced heavily by market and customer
requirementsparticularly in export channel. On the contrary,
domestic scenario in developingcountries depicts consumer awareness
and sensitiveness only at a basic level.This dichotomy is well
documented in an empirical research conducted onBrazilian agrifood
industry (Donovan et al., 2001). The study shows
higherimplementation rates of HACCP systems in meat export firms,
as compared tothe domestic firms dealing in fisheries. This pattern
is however changing asretail chains now emerging as major players
in the domestic market arebeginning to enforce compliance
requirements (Reardon et al., 1999; Punjabi andSardana, 2007).
The identified elements along with their labels used for ISM are
given in Table II.
Element No. Element detail
1 Strong legal/regulatory system2 Linking domestic regulatory
framework and performance in international
markets3 Lowering certification costs4 Increase in control over
primary production processes5 Consolidation and strengthening of
institutional structure6 Industry structure7 Investing in physical
infrastructure8 Tracking international food standards system9
Resourceful pool of human capital
10 Sensitive and responsive government intervention and
support11 Bridging industry and research academia gaps12
Strengthening surveillance systems13 Market/customer
requirement
Table II.Identified elementsenabling food standardscompliance in
developingcountry
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Pairwise comparison of identified elements that enable standards
complianceA contextual relationship leads to was chosen to identify
the interacting position ofeach element. This means that one
element leads to the other. An initial 13 13 matrixwas developed
for identified elements. Paired comparison between each pair
wasconducted and their relationship was indicated using Y for Yes
and N for No ina matrix and was sent to experts for their opinion.
This, instead of the Structural SelfInteraction Matrix (SSIM)
method, was adopted as two experts were not very familiarwith SSIM
matrix formation. Based on expert opinion, some relationships
presentedwere modified. To generate the Reachability Matrix, ISM
software was used. Thesoftware utilizes mathematical algorithms
that minimize number of queries necessaryto explore relationships
among a set of ideas (Warfield, 1976). The final pairedcomparison
result was used as input. In earlier studies conducted using ISM,
thisexercise was manually performed by Mandal and Deshmukh (1993),
Ravi et al. (2005),etc. A sample window depicting structural
analysis comparison between each pair towhich answer is Yes or No,
is shown in Figure 1.
The Reachability Matrix, indicating the relationship between
elements in binaryform was thus formed (Table III). Yes was encoded
as 1 and No was encoded as0.
The horizontal summation of entries (i.e. 1) indicates driver
power and verticalsummation of the same indicate dependence power.
For example, driver power anddependence power of element 4 are 6
and 8 respectively.
MICMAC analysisDeveloped between 1972 and 1974 by J.C. Duperrin
and M. Godet, MICMAC Analysis,stands for: matrice dimpacts croises
multiplication applique a un classement(cross impact
matrix-multiplication applied to classification). It complements
andextends impressions experienced users draw from visual analysis
of influencestructures. Specifically, MICMAC explores influence and
dependence between issuesand classifies them into dominant, relay,
dominated and autonomous (Godet et al.,2003) clusters. From
Reachability Matrix, driver power of each element is obtained bythe
summation of 1s in corresponding row. Similarly, dependence power
of each
Figure 1.Sample window of ISM
software depictingstructural analysis
comparison
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element is obtained by the summation of 1s in the corresponding
column. Afterobtaining driver power (influencer) and dependence of
each variable, they arepresented as driver power-dependence matrix.
Elements are plotted as points usingconventional x-y co-ordinate
system.
A movement to the right of the scale indicates an increase in
dependence while thatfrom bottom to top shows a rise in driver
power. South-West quadrant the area nearorigin with lowest points
on both scales indicate an autonomous cluster I. TheSouth-East
quadrant with highest point on dependence and lowest point on
driverpower is the dominated/dependent cluster II. North-East
quadrant with its highdependence and high driver power is the
relay/linkage cluster IV. This quadrantindicates high driver power
and low dependence and is therefore calleddominant/independent
cluster III.
The MIC-MAC Analysis Matrix (of elements enabling food standards
compliance) isshown in Figure 2. It can be seen that both Cluster I
and III representing autonomousand relay/linkage elements have no
constituents. Elements have gathered in clusters IIand IV
respectively and provide clear hierarchical indication on the
nature of theirdependencies. In the order of most dependent with
least driving power, elements stackup from 12 (strengthen
surveillance systems), 11 (bridge industry and researchacademia
gaps) and 9 (develop and maintain resource pool of human capital),
8 (trackinternational food standards system), 7 (invest in physical
infrastructure) leading up to4 (increase control over primary
production processes) in cluster II representingdominated/depending
element.
In cluster IV, indicating dominance or independence, elements
stack down from 10(sensitive and responsive government intervention
and support), to 5 (consolidate andstrengthen of institutional
structure), 1 (develop strong legal/regulatory system), 2
(linkdomestic regulatory framework and performance in international
markets), 3 (lowercertification costs) and 13 (respond to
market/customer requirement). They plot adiagonal pattern starting
from most driving and least dependent to least driving andmost
dependent element in this cluster. Element 6 (profile industry
structure) plotted in
Elements (i/j) 1 2 3 4 5 6 7 8 9 10 11 12 13 Driver power
Ranks
1 1 1 1 1 0 0 1 1 1 0 1 1 1 10 III2 0 1 1 1 0 0 1 1 1 0 1 1 1 9
IV3 0 0 1 1 0 0 1 1 1 0 1 1 1 7 V4 0 0 0 1 0 0 1 1 1 0 1 1 0 6 VI5
1 1 1 1 1 0 1 1 1 0 1 1 1 11 II6 0 0 0 1 0 1 1 1 1 0 1 1 0 7 V7 0 0
0 0 0 0 1 1 1 0 1 1 0 5 VII8 0 0 0 0 0 0 0 1 1 0 1 1 0 4 VIII9 0 0
0 0 0 0 0 0 1 0 1 1 0 3 IX
10 1 1 1 1 1 1 1 1 1 1 1 1 1 13 I11 0 0 0 0 0 0 0 0 0 0 1 1 0 2
X12 0 0 0 0 0 0 0 0 0 0 0 1 0 1 XI13 0 0 0 1 0 0 1 1 1 0 1 1 1 7
VDependence 3 4 5 8 2 2 9 10 11 1 12 13 5Ranks IX VIII VII VI X X V
IV III XI II I VII
Table III.Reachability Matrix
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this cluster is, but seen, breaking away from the diagonal
pattern followed otherwiseby all elements. At driving power 7 and
dependence 2, this element indicates itscapability to exert
considerable influence on standards compliance, but requires to
besupported by driving power of other independent elements as
well.
Partitioning the reachability matrixTo obtain ISM hierarchy, the
reachability matrix was partitioned, by derivingreachability and
antecedent sets. The element itself and other elements, to which it
mayreach to, generate reachability set whereas the element itself
and other elements whichmay reach to it generate antecedent
set.
For example, in the case of element 4 (in Table IV),
reachability set consists ofelements with entry 1 in horizontal row
corresponding to element 4. These are 4, 7,8,9,11 and 12.
Similarly, for element 4, antecedent set consists of those elements
withentry 1 in vertical column corresponding to element 4. These
are 1,2,3,4,5,6,10 and 13.
Intersections of these two sets were iterated and levels derived
for each element.Result of the first iteration is shown as level I.
No other element can be reached abovethis top-most level (Mandal
and Deshmukh, 1993). With identification of each
level,corresponding element(s) were separated from other elements
and further iterationsperformed until levels of all elements were
identified. Result of this exercise showingthe first level of
iteration is shown in Tables IV.
Figure 2.MICMAC Analysis Matrix
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For any element, if reachability set is a complete subset of
antecedent set, that elementwas taken out and iteration process
continued. Thus, after iteration1 (Table IV), forelement 12 alone,
the reachability set {12} is a complete subset of its antecedent
set{1,2,3,4,5,6,7,8,9,10,11,12,13}. Hence, element 12 was taken out
of the process and keptat Level I. Thereafter, the iteration
process was continued to determine the elements atlevels II, III,
IV, etc. Results of iterations at level II and XII (final level)
are shown inTables V and VI respectively.
Forming lower triangular matrix or conical form of matrixLevels
of enabling elements for standards compliance brought out by the
intersectionsof reachability and antecedent sets can be converted
into a lower triangular matrix orconical matrix. It provides a
clear indication of each elements hierarchy of influence.Beginning
with the element at level I and its corresponding elements that
reach to it, abinary matrix is formed. In this case, presented in
Table VII, at the top level is element
Elements Reachability set Antecedent set Intersection(Pi) R(Pi)
A (Pi) R(Pi) > A(Pi) Level
1 1,2,3,4,7,8,9,11,13 1,5,10 12 2,3,4,7,8,9,11,13 1,2,5,10 23
3,4,7,8,9,11,13 1,2,3,5,10 34 4,7,8,9,11, 1,2,3,4,5,6,10,13 45
1,2,3,4,5,7,8,9,11,13 5,10 56 4,6,7,8,9,11 6,10 67 7,8,9,11
1,2,3,4,5,6,7,10,13 78 8,9,11 1,2,3,4,5,6,7,8,10,13 89 9,11
1,2,3,4,5,6,7,8,9,10,13 9
10 1,2,3,4,5,6,7,8,9,10,11,13 10 1011 11
1,2,3,4,5,6,7,8,9,10,11,13 11 II13 4,7,8,9,11,13 1,2,3,5,10,13
13
Table V.Partitioned ReachabilityMatrix at level II
Elements Reachability set Antecedent set Intersection(Pi) R(Pi)
A (Pi) R(Pi) > A(Pi) Level
1 1,2,3,4,7,8,9,11,12,13 1,5,10 12 2,3,4,7,8,9,11,12,13 1,
2,5,10 23 3,4,7,8,9,11,12,13 1,2,3,5,10 34 4,7,8,9,11,12
1,2,3,4,5,6,10,13 45 1,2,3,4,5,7,8,9,11,12,13 5,10 56
4,6,7,8,9,11,12 6,10 67 7,8,9,11,12 1,2,3,4,5,6,7,10,13 78
8,9,11,12 1,2,3,4,5,6,7,8,10,13 89 9,11,12 1,2,3,4,5,6,7,8,9,10,13
9
10 1,2,3,4,5,6,7,8,9,10,11,12,13 10 1011 11,12
1,2,3,4,5,6,7,8,9,10,11,13 1112 12 1,2,3,4,5,6,7,8,9,10,11,12,13 12
I13 4,7,8,9,11,12,13 1,2,3,5,10,13 13
Table IV.Partitioning ReachabilityMatrix Iteration I
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12 (strengthening surveillance systems). This was placed as the
first element followedby elements 11 (bridging industry and
research academia gaps), 9 (resource pool ofhuman capital), 8
(tracking international food standards system), 7 (investing
inphysical infrastructure) etc.
Development of digraphISM application in agrifood industry can
be successful only if it is rightly interpretedby relevant
stakeholders. While lower triangular or conical matrix is a
familiar form ofpresentation in discipline of mathematics, it is
not so for food industry practitioners orpolicy makers. Hence, a
structural model was generated by means of vertices or nodesto
present the results graphically. The relationships between elements
are shown withthe help of arrows. Presentation of this nature is
called a directed graph or digraph. Adigraph pictorially interprets
contextual relationships between each of these elementsand their
hierarchies, as derived by modeling.
Elements 12 11 9 8 7 4 6 13 3 2 1 5 10
12 1 0 0 0 0 0 0 0 0 0 0 0 011 1 1 0 0 0 0 0 0 0 0 0 0 0
9 1 1 1 0 0 0 0 0 0 0 0 0 08 1 1 1 1 0 0 0 0 0 0 0 0 07 1 1 1 1
1 0 0 0 0 0 0 0 04 1 1 1 1 1 1 0 0 0 0 0 0 06 1 1 1 1 1 1 1 0 0 0 0
0 0
13 1 1 1 1 1 1 0 1 0 0 0 0 03 1 1 1 1 1 1 0 0 1 0 0 0 02 1 1 1 1
1 1 0 1 1 1 0 0 01 1 1 1 1 1 1 0 1 1 1 1 0 05 1 1 1 1 1 1 0 1 1 1 1
1 0
10 1 1 1 1 1 1 1 1 1 1 1 1 1
Table VII.Lower triangular/conical
matrix
Elements Reachability set Antecedent set Intersection(Pi) R(Pi)
A (Pi) R(Pi) > A(Pi) Level
1 1,2,3,4,7,8,9,11,12,13 1,5,10 1 X2 2,3,4,7,8,9,11,12,13 1,
2,5,10 2 IX3 3,4,7,8,9,11,12,13 1,2,3,5,10 3 VIII4 4,7,8,9,11,12
1,2,3,4,5,6,10,13 4 VI5 1,2,3,4,5,7,8,9,11,12,13 5,10 5 XI6
4,6,7,8,9,11,12 6,10 6 VII7 7,8,9,11,12 1,2,3,4,5,6,7,10,13 7 V8
8,9,11,12 1,2,3,4,5,6,7,8,10,13 8 IV9 9,11,12
1,2,3,4,5,6,7,8,9,10,13 9 III
10 1,2,3,4,5,6,7,8,9,10,11,12,13 10 10 XII11 11,12
1,2,3,4,5,6,7,8,9,10,11,13 11 II12 12 1,2,3,4,5,6,7,8,9,10,11,12,13
12 I13 4,7,8,9,11,12,13 1,2,3,5,10,13 13 VII
Table VI.Partitioned ReachabilityMatrix at final level XII
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Observations and discussionStandards compliance is a key area
affecting competitive performance of food industryand has
implications for both global and domestic markets. Interpretative
StructuralModeling (ISM) of critical enabling elements for food
standards compliance in adeveloping countrys food industry is shown
in Figure 3. Specific cases from Indianconditions have been used
throughout the study. Depending on their levels ofhierarchy of
influence, elements are presented in the form of a digraph.
On top level of the hierarchy lay dependent factors. These can
be achieved with thesupport of drivers or independent elements, as
found out from MICMAC analysis.Element 10 (sensitiveness and
responsiveness of government) showed maximumdriver power while
element 12 (strengthening surveillance systems) showed
maximumdependence, and this was further brought out in the digraph.
Thus, element 10(sensitive and responsive intervention of
government) was identified as the key enablerinfluencing compliance
of standards. This element needs continuous monitoring,
asgovernment sensitiveness and responsiveness has an overarching
effect on allother elements. Element 5 (consolidate and strengthen
institutional structures), next inthe hierarchy, is decisive in
translating governments sensitiveness and responsivenessto
compliance.
Element 3 (develop strong legal/regulatory system) is third in
hierarchy. It imbibesstrength from the two earlier explained
elements 10 and 5 respectively. Entrepreneursin developing
countries are faced with business and economic inefficiencies, due
towhich a majority take detour to compliance. This, they believe
will help reduceoperating costs and increase profits.
Element 2 (link domestic and international markets) is
instrumental in realizingelement 3 (lower certification costs) as
certification (private standards a sine-qua-nonfor the export
industry) is becoming a necessity in global competitive trade.
Element 8 (track international food standard systems) can give
major impetus tostandards compliance. Agrifood companies engaged in
this exercise are very limited.Element 10 (sensitive and responsive
government intervention and support) is theenabler for other
elements 5 (consolidate and strengthen institutional structures),
1(develop strong legal/regulatory framework), 2 (link domestic and
international marketperformance requirements), 3 (lower
certification costs), 13 (respond to market orcustomer
requirements), 4 (increase control over primary production
processes) and 7(invest in physical infrastructure) respectively.
They play a major role in successfullytracking the progress in food
standard setting at international levels.
Element 6 (profile industry structure) falls in the independent/
dominating clusterIV of MICMAC analysis, but is not very strong an
element as depicted. However, itimpacts other elements.
Entrepreneurs and their farming/processing units, whenlawfully
registered become part of an organized group. This can structure
the industryand provide it greater visibility, making this an
enabling factor for standardsenforcements and subsequent
compliance. Standards enforcement is an acceptablechallenge when
industry is organized. The food sector in developing countries has
verylittle organized component. Membership of organized
professional groups will enhanceopportunities and exposure of
farmer-producers or entrepreneurs. It will also helpunderstand
competitors processes and standards compliance measures. The
practicalapplication of element 12 (strengthen surveillance system)
is recognized. It is alsorealized that industry structure further
influences elements 4 (increase control over
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Figure 3.Interpretative structural
modeling (ISM) forelements enabling
standards compliance indeveloping country food
industry
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primary production, 7 (investment in physical infrastructure)
and 9 (develop andmaintain resource pool of human capital) etc.
Element 11 (bridge industry and research academia gap) is
critical in standardsenforcement and indicates high dependency.
This can tap potential of scientificcommunities and research
facilities available in developing countries such as
India.Competitive strengths in knowledge domain possessed by
research academia canenhance understanding of standards and their
relevance/implications for a produce orproduct. The element however
is dependent on elements 1 (develop stronglegal/regulatory system),
10 (sensitive and responsive intervention of government) etc.
Concluding remarks and policy implicationsAs digraph in Figure 3
indicates, the most critical element capable of firing up
enablersfor standards compliance is element 10 (sensitive and
responsive governmentintervention and support). Role of government
in a developing country scenario can becrucial, as shown by the
output of ISM process. This element can initiate, revive
andgenerate responsive action from all stakeholders, provided
commitments are assuredin its own ranks. Each element identified
has a policy implication and these are listed,keeping Indian
context in focus:
(1) Element 5 (consolidate and strengthen institutional
infrastructure) can be thefirst measure of action towards
compliance. Fixing accountability in managerial(officer) cadres
will enable responsive and timely action leading to
realisticmonitoring of institutional set ups, preparation and
ground work for policymaking involving stakeholders at all levels,
expeditious but prudent andrationalistic decision making on policy
programs and their successfulimplementation.
(2) Government initiative towards element 1 (develop strong
legal/regulatorysystems) has to move on fast track. Taking other
developing countries cases asexample, Indian government should
implement IndiaGAP at the earliest tostrengthen domestic producers
at the farm level and equip them to handleglobal private standard
systems.
(3) The government should do away with dichotomy in production
channels forexports and domestic markets. This can be done in
phases and domesticstandards can progressively move towards global
production standards, thuselement 2 (link domestic regulatory
framework and performance).
(4) Element 3 (lower certification costs) can be realised with
the implementation ofIndiaGAP. Lower costs thus can not only help
government make IndiaGAPmandatory but can also motivate farmer
producers to implement it. While in theshort run, this exercise
could bring a certain amount of hardship to theproducers in terms
of compliance, in the long-run, this will benefit domesticproducers
and give them impetus to produce better quality products and
realizehigher incomes::. The government should update and annually
publish the registered list of
food processing companies in agrifood sector. This should be
consolidated ata central location rather than with different
government divisions handlingfruit and vegetables, meat and meat
products, marine products etc.
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. A single national chamber of commerce or industry association
should berecognized by government as apex body for agrifod
processing sector. Itshould be made mandatory for all producers and
processors to be registeredwith this association. It should be
capable of readily providing a groupstructure to the sector.
Membership of association should entitle members toinformation
feeds on regulatory requirements pertaining to
investment,production, processing, global practices etc. through a
single window. Thisassociation can also act as a major link between
industry and government inpolicy making and other activities.
The two action points will help element 6 (profile industry
structure) and thushelp in systems monitoring, tracking compliance
practices etc.
(5) Campaigns have to be initiated to sensitize and develop,
especially in producerprocessor communities, an appreciation for
standards compliance and itsimplications for them in global
context. Using visual media aids anddocumented publications, these
campaigns should be actively initiated andimplemented.
Responsibilities for running these campaigns can be entrustedwith
village level extension officers at grass roots, a cadre whose
performancehas been a cause of concern for producer and hence
require urgentaccountability and action. This, along with other
recommendations would becrucial for element 4 (increase control
over primary production processes).
(6) The government should encourage element 7 (invest in
physical infrastructure)such as testing facilities, research
centres etc. through Public-Private-Participation (PPP) mode.
Community infrastructure is costly to build andgovernments have
meager resources which tend to be thinly spread over
differentprojects. A collaborative effort, involving industry
stakeholders will helpgovernment leverage private sector capital,
project management expertise etc.
It should be mandatory to initiate preparatory processes in
sufficient advance ofCodex and such other international negotiation
meetings, Government shouldalso make it mandatory to include a
designated technical-cum-legal expert(entrusted with tracking of
Codex meetings and preparatory processes) whoseminimum serving
period should be five years. This will ensure continuity
andregularity to the team preparing for such missions. Industry
also should besensitized through campaigns on significance of
element 8 (track internationalfood standards systems) at their
ends.
(7) Under the main authority on food standards, government
should set up a teamof exclusive and well trained scientific and
legal professionals (element 9 develop and maintain resource pool
of human capital) qualified to deal withtechnical and regulatory
issues in agrifood sector. They should be trained underexpert
guidance to follow Codex and allied or related global regulatory
systemsand procedures and be capable of developing trade documents
if necessary orprovide advisory services to the government as well
as industry.
(8) Projects ensuring collaborative working by academia and
industry can beinitiated under government schemes for program
implementation and growth.Incentives to firms implementing academia
researched projects in theirbusinesses and similar incentives for
team based academia initiatives, whereresearch is transformed and
utilized in actual businesses can provide impetus toelement 11
(bridge industry academia gaps).
Interpretativestructuralmodeling
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Standards compliance in developing countries can be realized
only throughcoordinated efforts led by government which is well
participated and collaboratedby industry stakeholders and sustained
by element 12 (strengthen surveillancesystems).
This paper has attempted to model, using Interpretative
Structural Modeling (ISM),elements that influence the standards
compliance in a developing country with specificexamples from India
Standards compliance issues are major limiting factors in
globaltrade for developing economies. While ISM has been widely
used in supply chainresearch to examine performance of operations
related activities, this is a hithertounexplored use of the tool to
examine food standards compliance and its dimensions.The paper
spells out the need for the government in a developing country, to
take thelead by becoming more sensitive and responsive to its
regulatory framework. Thiswould have a cascading effect on the
working of other elements and thus lead to higherstandards
compliance results and consequent positive business performances.
Theexercise has highlighted the hidden relationships between
various elements andprovides clear directions to areas where
actions need to be taken.
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About the authorsSilpa Sagheer is PhD candidate, Department of
Management Studies (DMS), Indian Institute ofTechnology (IIT),
Delhi. Currently on sabbatical, she is Senior Assistant Director in
the foodprocessing division (Confederation of Indian Food Trade and
Industry CIFTI) of Indias apexindustry body Federation of Indian
Chambers of Commerce and Industry (FICCI), New Delhi.Silpa Sagheer
is the corresponding author and can be contacted at:
[email protected]
Surendra S. Yadav is Professor and Head, Department of
Management Studies (DMS), IndianInstitute of Technology (IIT),
Delhi. His interest areas are, International Business and
Trade,Corporate Finance, International Finance and Security
analysis & Portfolio Management. He isvisiting faculty at
University of Paris, INSEEC Paris and Paris School of
Management.
S.G. Deshmukh is Professor, Department of Mechanical
Engineering, Indian Institute ofTechnology (IIT), Delhi. He has
more than 18 years of teaching and research experience. Hisresearch
interest includes Operations Management including modeling and
analysis of SupplyChain and Quality issues and Small Enterprise
Management. He has been coordinator of AppliedSystems and Research
Programme, and Quality Improvement Programme at IIT Delhi and
isalso associated with renowned societies like IIIE, ISME, POMS,
NCQM etc.
Interpretativestructuralmodeling
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