Effect of best management practices on the performance and productivity of small firms

Abstract

Recent research on productivity finds that best management practices are a crucial but neglected element in explaining firm productivity. This stream of research also focuses on why a large number of firms may not implement best management practices despite their apparent benefits. In this paper, we examine the adoption of best management practices in small leveraged buyout (LBO) firms. Our choice of small LBO is motivated by the fact that these firms undergo extensive restructuring and, therefore, there is an opportunity to study the adoption process of best management practices. The findings show that buyout companies introduce best management practices (operations, monitoring, targets and incentive-related practices) at different stages of their development, and more importantly, these practices evolve in response to changes in various firm-level characteristics. For example, companies emphasizing cost leadership tend to follow targets and monitoring related practices while firms following a differentiation strategy are more likely to implement incentives and operations related management practices. Buyout sponsors’ board representatives and new CEO also play a critical role in the adoption of these best management practices which are linked to superior firm performance, measured as growth in revenues, productivity and return on assets.     

Socially Responsible Practices: An Exploratory Study on Scale Development using Stakeholder Theory

Socially responsible practices of firms have evolved into an important area of research in operations management; however, it remains challenging to identify specific scales that capture multiple dimensions of such social practices. In this exploratory study, we use stakeholder theory to develop new multi‐item measurement scales linked to multiple groups (i.e., internal, supplier, customer, and community stakeholders). Furthermore, we empirically test a higher order multidimensional construct that collectively assesses the socially responsible practices of a firm. Using these stakeholder‐derived constructs as taxons in a cluster analysis, we identify important patterns in the way that multiple groups of stakeholders are engaged. Finally, we demonstrate that the set of social practices are complementary and concentrating on one group can yield spillover effects to other specific stakeholder groups.     

A Multi-disciplinary Identification of Issues Associated with ‘Contracting’ in Market-oriented Health Service Reforms

Multi-disciplinary perspectives from operational research, management information systems, purposeful activity systems, accounting and finance, transaction-cost economics and organization learning are discussed in relation to `contracting' in the NHS following the recent reforms, applied within the general framework of soft-systems methodology. These are then used to frame questions for collecting information about contracting practices and issues. The data so collected suggest that the issues and activities associated with contracting can be grouped into five interacting categories of: strategy formation, making enabling arrangements, operational management of contracted activities, identifying and relating to stakeholders, and carrying forward organizational learning from experience. Each of the disciplinary perspectives attributes significance to specific forms in these five activities. The possibility of some multi-disciplinary linking of theoretical perspectives is demonstrated. Information and purposeful systems are central to this, being on the one hand created by social processes which define relevant information and corporate alignments of purpose, and on the other hand patterns of activity that can be evaluated in terms of contribution to these purposes, with properties of greater or lesser inhibition of innovation to improve purpose achievement. As a case study of an attempt at inter-disciplinary research, it demonstrates that interdisciplinary linkage can be made, though certain epistemological issues are skated over in the process. On the basis of the case study, some of the richness and insight of the different perspectives is lost in the process. The critical debate about the neutrality of soft-systems methodology is commented on in the light of the study.     

Assigning migrants to customer contact jobs: a context-specific exploration of the business case for diversity

Ethnic diversity of both their labor forces and customer bases presents a challenge for companies and fuels debate on the business case for diversity: the view that diversity positively impacts firm performance. This study enriches the business case debate by focusing on a particular organizational activity, customer contact. It combines theory from strategic human resource management (SHRM), research on diversity, and research on marketing to analyze what drives companies to assign migrants to customer contact jobs and which performance impacts ensue. We test our hypotheses in data from 338 German business companies. Companies that recognize the value in ethnic diversity and seek to respond to customer diversity are especially likely to assign migrants to customer contact jobs. The analyses reveal a positive impact of migrants in customer contact jobs on company profitability. This impact is enhanced by a broad range of equality and diversity practices and a supportive works council. These moderators have stronger effects than two other moderators related to business strategy: the market served by a company, and its competitive strategy. The paper contributes to SHRM research in general and diversity research in particular through its original examination associating the business case for ethnic diversity with the role of equality and diversity practices and institutions. The study findings can help managers to decide whether to leverage staff ethnic diversity and show that collaboration between HR management and marketing functions is useful to achieve a strategic fit among practices.     

Exploring the link between human resource practices and turnover in multi-brand companies: The role of brand units’ images

Using exploratory qualitative research undertaken in a multi-brand fashion company, this article investigates the role that brand units’ images play in the link between human resources management (HRM) practices and employee internal and external turnover. Our results suggest that the existence of imbalanced and differently attractive brand units’ images might weaken or remove the effectiveness of corporate HRM practices in keeping internal and external turnover rates low. This because employees may be interested in transferring to the most appealing brand(s) or, if not possible to do so, leaving the company. This article contributes to the debate regarding the use of HRM practices in multi-brand companies, especially in industries where both the brand and the product have a highly-symbolic content. Based on our conclusions, we recommend that brand units with less prestigious images compensate for their lower attractiveness with specific brand unit HRM practices to attract and retain their employees. Theoretical and policy implications of the findings are discussed.     

Evidence-based human resource management practices in three EU developing member states: Can managers tell truth from fallacy?

Good management practice is assumed to be the product of a good knowledge base and its application, not least in Human Resource Management (HRM). The aim of this study is to assess the extent to which managers adhere to practices of HRM that are more likely to be upheld by research evidence as opposed to beliefs for which research evidence is highly lacking. In addition, it evaluates practitioners’ explanations about adopting HR practices. This study was conducted in three European Union (EU) developing countries (Poland, Croatia and Malta). A mixed-methods approach is adopted, utilising a web-based questionnaire targeting a purposive sample of 300 practitioners occupying managerial positions and directly involved in people management (Study 1), followed by 20 in-depth interviews with similar participants (Study 2). Our study reveals that managers are always fully cognisant of the main body of research evidence related to specific HR practices. Practitioners are more likely to access required knowledge for applications through popular sources rather than more reliable ones due to time constraints, inaccessibility and inability to evaluate evidence. While they appreciate the role of theory, the leap from theory to application is not easy or straightforward, commenting that large gaps between research and practice prevail. These overall trends may imply that practitioners base their decisions on personal experience rather than on evidence-based knowledge or expertise acquired through evidence-grounded applications. Results suggest that future research should focus on closing the gap by evaluating how academics impart the knowledge and how practitioners apply that knowledge.     

Reproducibility and replicability crisis: How management compares to psychology and economics – A systematic review of literature

The past decade has been marked by concerns regarding the replicability and reproducibility of published research in the social sciences. Publicized failures to replicate landmark studies, along with high-profile cases of research fraud, have led scholars to reconsider the trustworthiness of both findings and institutionalized research practices. This paper considers two questions: (1) Relative to psychology and economics, what is the state of replication and reproduction research in management? (2) Are the disciplines equally advanced in the use of methods applied to study the replication problem? A systematic literature review identified 67 studies pertinent to these questions. The results indicate that the replication prevalence rate in management studies lies almost exactly between those of psychology and economics, while a high level of variation between management and other business-related disciplines can be noted. Further, similarly to psychology, but unlike economics, the surveys of published replications tend to report high replication success rates for management and other business-related disciplines. However, a comparison with recently obtained results in preregistered multi-study replications in psychology and economics suggests that these rates are almost certainly inflated. Method and data transparency are medium to low, often rendering attempts to reproduce or replicate studies impossible. Finally, the understanding of the replicability problem in management is held back by the underutilization of methods developed in other disciplines. The review also reveals that management, psychology, and economics exhibit strikingly different practices and approaches to replication, despite facing similar incentive structures. Disciplines in which replication and reproduction attempts are rare and which frequently involve authors of the original study in replication attempts lack strong deterrents against questionable research practices; thus, they are less likely to deliver replicable results.     

How MNE subsidiaries transfer HRM practices in distant environments: A tale of two IKEA subsidiaries

While most research in the international business field focuses on the impact of the national institutional environment on multinational enterprises (MNEs), this paper explores the opposite relationship—the role and impact of MNE subsidiaries on the host country institutional environment. I analyze the subsidiaries' agency in the transfer activities of human resource management (HRM) practices by bringing the case of IKEA subsidiaries in Korea and Japan and find that these subsidiaries not only adapted to pressures arising from an institutional distance but also played an important role in influencing the institutional arrangement for employment system of their host countries. With a contextualized agency model, this study finds that institutional and organizational contexts that these subsidiaries are embedded in shaped their agencies and strategic responses and co-evolved with their host institutional environments while transferring HRM practices. These findings have implications for the IB and IHRM field, as they highlight the potential of MNE subsidiaries as agents.     

Spare parts classification and demand forecasting for stock control: Investigating the gap between research and practice

This paper investigates the gap between research and practice in spare parts management, with specific reference to durable goods addressed to private or professional customers. The paper provides a critical literature review of theoretical contributions about spare parts classification and demand forecasting for stock control. The discussion of ten case studies, then, allows to analyze the reasons for this gap, by addressing the limitations of models developed in literature, the role of contextual factors and the maturity in companies' spare parts management practices. Four main directions for research are proposed in order to bridge the gap, namely: to develop integrated approaches to spare parts management; to define contingency-based managerial guidelines, to favor the knowledge accumulation process in companies, and to supplement theoretical models with practical relevance.     

Knowledge management in consultancy-involved process improvement projects: cases from Chinese SMEs

Abstract

Knowledge management (KM) is considered as an effective strategy to improve organizational performance. In its application to small and medium enterprises (SMEs), resource constraints mean that exploitation of knowledge from external sources is often needed. This study explores practical KM issues encountered by Chinese SMEs when working with management consultants to introduce new business improvement practices. A comparative case study is conducted focusing on two consultancy-involved process improvement projects in Chinese manufacturing SMEs. The case results suggest a clear KM strategy is needed at the outset of the project and SME managers and employees need to play a proactive role in the learning and adoption of new knowledge. The research is novel in that it is the first study to explore knowledge management and the notion of liminality within the context of consultancy-involved Chinese SME improvement projects. The paper culminates with two research propositions that require further empirical study.     

Understanding indigenous leadership research: Explication and Chinese examples

Integrating the constructivist and positivist research traditions, we propose a three-step methodological framework and use a study of Chinese indigenous leadership practices as an example to illustrate how to utilize the framework to study indigenous leadership practices. We argue that indigenous leadership research is an ideal way to examine and interpret leadership practices in a specific social context because not all leadership practices are captured in dominant Western perspectives that utilize Western-built instruments, which often fail to account for perspectives and practices of leadership in non-Western contexts. Finally, we discuss implications of the proposed methodology on leadership research and offer suggestions on how to deal with challenges when conducting indigenous leadership research in various cultures.     

Assessment of systemic greenness: a case study of tyre manufacturing unit

Abstract

In this paper, we develop an assessment framework to evaluate the systemic greenness of a tyre manufacturing unit by capturing the interactions between the green practices implemented. By reviewing the existing literature, we propose a stakeholder-based green practices framework comprising of operation strategy practices, process practices, employee practices, regulatory practices, customer practices, competition practices, social practices, and supplier practices. The empirical data on the interactions of green practices between and within stakeholders are collected by conducting a detailed case study of a large radial tyre manufacturing unit in India. We use graph-theoretic approach to incorporate the interactions between different green practices and assess the systemic greenness of the case organisation. Based on the systemic greenness attained, we rank the green practices within stakeholders and also between the stakeholders. We conduct scenario analysis to develop a systemic greenness index and a scale to assist practitioners in evaluating and benchmarking the greenness performance. We also discuss implications for theory and practice along with the inherent limitations.     

企业战略三维坐标体系及其风险测度

近年来,简化定量化测量企业管理实践的方法,一直是发达国家研究人员关注的重要课题。以往的定量化测量方法,基于二维测量,而且较复杂,即不变于企业测量,也不能全面描述企业管理实践的现状。文章作者基于长期大型企业集团高级经理人的实践,结合以往学者的研究成果,提出战略理论模型及战略融合度等新概念。文章提出的三维测量方法便于企业自我测量,并能较全面地描述企业管理实践现状及其风险。文章依据战略模型描述的案例,是某大型企业管理实践及其成长的真实案例。文章提出的战略模型及其测量方法,实现了企业管理实践测量方法的创新,丰富了该领域的研究。     

Limitations to Freedom: is there a Choice for Human Resource Management?

There is a great variety in human resource management (HRM) practices, not only in terms of policies and personnel activities, but also with regard to the parties involved and the procedures for decision-making. But which factors can best account for these differences? Are they due to organizational and environmental characteristics or are they basically due to the interests, preferences and power positions of the parties concerned - parties like management, employees, personnel management staff, trade union representatives, members of the works council and so on? Based on elements of industrial relations theory, organization theory and organization sociology, a research project was set up with the aim of gaining a better understanding of the factors which can shape HRM practices. The empirical part of the research consisted of paired comparative case studies from different industries. The result is a conceptual model which not only encompasses the relevant forces in the shaping of HRM, but also states the conditions determining the amount of room for manoeuvre the parties concerned have to make their own strategic choices with regard to HRM.     

Knowledge management for food supply chain synergies – a maturity level analysis of SME companies

Abstract

Despite the considerable number of papers addressing knowledge management (KM) aspects in supply chains, many research issues in the area are still neglected. One of the main research gaps in this field concerns the maturity level of KM practices adoption by small and medium enterprises (SMEs). This paper addresses this research gap by developing a framework to support the analysis of the maturity level of KM adoption in an SME context. The framework is applied in a multiple case study developed to investigate the extent to which SMEs operating in the food sector are deploying KM practices to support more sustainable initiatives. By relating KM maturity levels, perspectives and processes to sustainable practices concerning food waste and by-product synergies, the paper makes an original contribution to advance theory and practice in the area. The paper also points out potential barriers that companies face to implement sustainability-related KM practices.     

Knowledge management systems: surveying the landscape

Knowledge management systems (KMS) are the tools and techniques that support knowledge-management practices in organizations. The study of these systems consists of a small but growing body of literature. In the last two years alone, at least four books, two special editions of journals and a number of academic and practitioner articles have been published related to this area. However, much of the work that has been published has been in the form of isolated survey studies, or anecdotal case studies into particular aspects of KMSs. This has made it difficult to build a cumulative body of knowledge into the development, use and management of these systems. The purpose of this paper is to 'survey the current landscape' of KMSs, and provide a framework for research into the development and use of these systems in organizations. The intent is to highlight areas where 'gaps' exist in what we know about KMSs and suggest ways to close those gaps.     

Quality management, environmental management and firm performance: A review of empirical studies and issues of integration

Quality management (QM) and environmental management (EM) are two business practices that may affect firm performance. These practices are being increasingly introduced into firms, which often use them jointly owing to their similarities. As a result of these similarities, their integration has become a popular topic of research and practice. In the field of integration, the highest level of integration may be achieved by means of a single, full QM–EM system (QEM) in which QM and EM lose their independence. It is therefore desirable to identify dimensions from which to assess these management practices and their effects on performance. The aim of this paper is to carry out a literature review in order to propose and analyse dimensions for QM, EM, QEM and firm performance, as well as models of cause–effect relationships between these variables. The topics reviewed are the following: (1) the QM and EM dimensions; (2) the empirical studies about QM–performance and EM–performance links; and (3) issues of integration. The review suggests that the large body of QM research may inform EM and QEM. This is so because research on the QM side is more advanced and developed than that on the EM side.     

Performance Appraisal,Performance Management,and Firm-Level Performance: A Review,a Proposed Model,and New Directions for Future Research

Abstract

There has been a long history in management and industrial/organizational psychology of studying methods to improve performance at work. These efforts have traditionally been concerned with individual-level performance (with some attention paid to team performance as well); even when research began to more broadly consider the topic of performance management instead of just performance appraisal. However, the often unstated assumption was that, if an organization could effectively improve the performance of individual employees, this would accrue to improvements in firm-level performance as well. A review of the literature suggested that this link had never really been established in a direct way. Instead, we found considerable support for relating “bundles” of human resource (HR) practices to firm-level performance, and several models for how these practices could create the transformation from individual-level to firm-level performance. We drew upon several of these models, from somewhat diverse literatures, to propose a model whereby bundles of HR practices, when aligned with the strategic goals of the organization, can be used to create a climate for performance that could transform generic knowledges, skills, and abilities (KSAs) into specific KSAs needed to improve firm-level performance.