International Journal of Business Performance Management (18 papers in press)
International Business Development in China - A study of globalisation and performance
by Linda Li
Abstract: Globalisation has witnessed ever increasing cross border business developments. Most enterprises come to realise that cross cultural business development and management is just as important as cutting edge technologies. This paper is a study of an international environmental company that had a successful development in China based upon its sensitivity to cross-cultural business development issues and apt management decision and timely measures. The findings of the surveys and interviews that this study conducted show that there were differences in the perceptions by the company staff in its UK head office and those in China with regards to the business cultures of the country where they were operating. Such differences also affected to a certain extent the communications and interactions between the two teams and ultimately the business development.
Keywords: cross border business development cross-cultural communication business management management localisation.
Inventory Holding and UK SMEs Performance
by Godfred Afrifa
Abstract: This paper examines the relationship between inventory holding and firm performance for 141 small and medium-sized enterprises listed on the Alternative Investment Market for an eight year period (2005 to 2012). Panel data regression analysis is used in the estimation of functions relating the inventory holding with measures of firm performance. The results provide empirical evidence which indicates the existence of an optimal inventory level that maximises performance. The results show that a concave relationship exists between inventory holding and performance. Furthermore, the paper determines whether or not deviations from the optimum inventory level reduce performance. The results indicate that deviations above or below the optimum inventory level decreases performance. Overall, the findings provide evidence that firms should strive to attain the optimal inventory level in order to maximise their performance.
Keywords: Inventory holding; firm performance; small and medium enterprises; UK.
The Implication of Strategy Improving Employees Training, Compensation, Motivation and Organizational Commitment as Predictors of Work Performance in Private Commercial Banks Indonesia
by Musriha Musriha
Abstract: The purpose of this study was to examine effects of an integrated model of Strategy Improving Employees Training, Compensation, Motivation and Organizational Commitment to Performance This study used a causal effect design. The main data used in this study were primary data collected through the distribution of questionnaires to the respondents of Private commercial banks in Indonesia. The sampling was done using a purposive sampling method to determine the sample based on the consideration of researcher. The result of the research shows that strategy improving employees training, compensation, motivation and organizational commitment positively affect the performance.
Keywords: Training; Compensation; motivation; organizational commitment and performance.
Perspective on Individual and Group Characteristics to Enhance Work Performance and Career Development: An Empirical Research on Indonesia Port Corporations
by Musriha Musriha, Eddy Hidayat Nurjaman
Abstract: The purpose of this research is to prove and analyze the influence of individual characteristics, working environment, and organizational culture towards working motivation, and performance, and career improvement of PT Pelabuhan Indonesia (Pelindo) IV employees. It is conducted to employees in PT Pelindo IV, as they have the potentiality to step up to the highest position and minimize the desire of employees to be rotated or transferred between branches port so that the pattern of mutation and careers can be hampered. This research summarizes twelve hypothesis, namely: 1. Individual characteristics significantly influence on employees working motivation, 2. Working environment significantly influence on employees working motivation, 3. Organizational culture significantly influences on employees working motivation, 4. Individual characteristics significantly influence on employees performance, 5. Working environment significantly influences on employees performance, 6. Organizational culture significantly influences on employees performance, 7. Individual characteristics significantly influence on employees career improvement, 8. Working environment significantly influences on employees career improvement, 9. Organizational culture significantly influences on employees career improvement, 10. Working motivation significantly influences on employees performance, 11. Working motivation significantly influence on employees career improvement, and 12. Employees performance significantly influence on employees career improvement. However, this study indicates that from the 12 proposed hypothesis, nine (9) of them are significantly affected, while the other remaining 3 are insignificant.
Keywords: Human Resource Management System; Employees Motivation System; Organizational Culture; Employees Performance; Career Development.
AGENCY CONFLICTS BETWEEN BUSINESS OWNERS AND MANAGERS: EMPIRICAL EVIDENCE FROM TUNISIA
by Mariem Amamou
Abstract: This paper gives a solution to reduce agency conflicts that arise between managers and firm owners. Based on the literature, it is argued that the ultimate aim of the firm is to improve and maximize benefits. However, such objective is often not compatible with manager interests whose search is to realize their own interests. The discrepancy of interests contributes to agency conflicts. An econometric model was performed to study this problem and examines the relationship between managerial implication and firm performance. The model was applied to 10 Tunisian banks during the period 2000-2015 and employed a structural equation modeling with two simultaneous equations to test both managerial involvements on risk and performance. The fitting model showed the relevant role of managers implication on the capital of firm and how it can reduce conflicts of interest. In addition, we show that in the case where managers are weakly involved, managerial implication creates more value for the shareholders. The results of the statistical analyses show that causal relationship between firm performance and managerial implication depends on the level of risk-taking by the managers and approaches zero at a critical bank risk equal to 20.55%. On the other hand, the relationship between risk and share of managers vanishes at a critical performance point equal to 42.70%. Furthermore, managers implication in bank capital encourages them to undertake more risk (superior than 20.55%) and consequently realize more performance. In general, our results call for implementing performance management system to help banks better manages their employees performance and in turn, reduces conflicts between managers and owners.
Keywords: Agency Conflict; Manager Implication; Risk; Performance; Tunisian Banks.
New Opportunities, Challenges and Realities for the Media Industry in Greece: An Empirical Examination of the Effects of the Financial Crisis and Digital Technologies on Media Business Performance
by Avraam Papastathopoulos, Panagiotis Koutsouvelis, Jacob Cherian, Robert Pech
Abstract: The impressive developments of new technologies have brought about, inter alia, turbulence and significant problems in the financial performance of the media industry in Greece, particularly with reference to the impact on newspapers and other print media. This impact has caused change and the financial crisis which has plagued Greece for well over a decade has also generated change. Estimates of linear multiple regressions show a highly significant relationship between the number of newspapers in circulation and an explanatory number of variables such as the proportion of the population having access to the Internet, which is representative of the evolution of technology; In other estimates of multiple regressions, the developments in technology and the crisis seem to have had a major impact in the medium-term annual average share prices of every one of the newspaper companies that make up the industry. Therefore, the developments in technology and the crisis seem to have had a major impact on the financial performance of these companies as evidenced by their effect on the main financial ratios in the industry, which generally show a decline.
Keywords: financial crisis on media; internet technologies; financial performance on media; print and online media.
Measuring the lean readiness of Kuwaiti manufacturing industries
by Mohamad ALNAJEM, Jose Arturo Garza-Reyes
Abstract: The purpose of this paper is to measure the readiness of the Kuwaiti small and medium sized manufacturing industries to implement the lean system through an evaluation of their existing quality practices, and compare such readiness among different product sectors and ownership types. This study adopts the measurement framework developed by Al-Najem et al. (2013), which establishes six constructs related to lean quality practices, namely: process, planning and control, customer relations, suppliers relations, HR, and top management and leadership. Data were collected from a survey of 50 Kuwaiti small and medium sized manufacturing industries operating in different industrial sectors. One research question and two hypotheses were developed and tested using t-test and Levenes test, descriptive analysis, and one-way ANOVA. The results demonstrate that the Kuwaiti small and medium sized manufacturing industries are far from being ready to implement lean. In addition, the study found that product sector and ownership type have no significant impact on the lean readiness in the Kuwaiti small and medium sized manufacturing industries. This research provides insight into preparing Kuwaiti, and other small and medium sized manufacturing industries, to implement the lean system by creating an assessment of their existing lean practices and lean readiness. This research is among a limited number of studies that have addressed lean within the Arab region, and only the second to examine the level of lean readiness of the Kuwaiti small and medium sized manufacturing industries. It expands the literature on lean in developing countries, particularly in the Arab region, and can provide guidance to research within other countries in the region.
Keywords: Kuwaiti small and medium sized industries; lean system; lean readiness; manufacturing industries.
Ex-post service contract performance management
by Brian Forbes, Malcolm Brady
Abstract: This paper highlights how contract incompleteness can threaten the performance of public procurement facilities management contracts during their implementation stages, based on a multiple case study comprising five public procurement services contracts. The paper takes a principle-agent view and with the unit of analysis being the contract itself. The paper shows that contract contingencies are almost inevitable and may stem from the written contract or from the participating organisations. Written and unwritten contract management mechanisms were used in practice to deal with contingencies as they arose in the services case studies examined. The paper found that written contracts do not always provide satisfactory remedies for unexpected contingencies. Ex post mechanisms were used to manage the contract including incentives, information systems and signals. Time, resource or position signals were used in all five cases and provided an effective mechanism to manage unexpected contingencies in written contracts that proved to be incomplete.
Keywords: services; facilities management; public procurement; principal; agent; contract; unwritten; signal.
Organizational Excellence as a Marketing Tool: Greater Amman Municipality (GAM) as a Case Study
by Ghazi Al-Weshah
Abstract: This study aims at providing a deeper understanding of current status of organizational excellence (OE) from executives perspectives in Greater Amman Municipality (GAM). More specifically, the study investigates OE benefits, tools, challenges, and evaluation criteria from executives perspectives in GAM. The study employs the qualitative case study design; Semi- structured interview is conducted as data collection instrument. Seven executives from GAM were selected for interview based on the purposive sample. Thematic and textual analysis of each interview transcript has been employed. To build a holistic view of the case study, cross- interview analysis has been adopted to highlight the study themes. The study concludes that OE has not been implemented effectively in GAM, although there are planned methodologies for each implementation dimension. Moreover, The common challenge encountered by OE implementation is lack of top management support and low available resources. The study recommends that continuous evaluation of customer satisfaction can be pursued by GAM based on clear, measurable, and reliable criteria. The study provides important lessons in applying OE models for practitioners and policy makers in governmental organizations generally and GAM particularly.
Keywords: Organizational Excellence; Qualitative Approach; Interviews; Greater Amman Municipality; Case Study; Governmental Sector; Jordan.
An Evaluation of Performance of Public Sector Financial Institutions: Evidence from Pakistan
by Muhammad Haris, Yao HongXing, Gulzara Tariq, Ali Malik
Abstract: The purpose is to analyze the impact of internal factors and government change on the individual as well as the sector-wide performance of public sector banks of Pakistan. The study employs balanced panel data. The OLS-robust regression is used to examine the impact of internal factors, including Log (TA), LDR, IAR, EQTA, NPLR and government change (GOV), a dummy variable, on the profitability of public sector banks measured by ROA, ROE, PBTR & NOM. To analyze the performance of the overall public banking sector and each bank separately, the graphical method is used. The study reveals indifferent results in terms of government change but reports negative impact of government transition on performance. It also finds NPLR as the most significant factor for the profitability of public sector banks of Pakistan.
Keywords: Pakistan; Public Banks; Financial Performance; ROA; ROE; PBTR; NOM; Government change.
Analyzing non-profit business processes using a soft systems methodology
by Kenneth David Strang
Abstract: The focus of this research is to identify the most effective business processes of 20 high performing non-profit organizations in the USA using a visual soft systems business process analysis methodology. Of the 52 business processes identified, two in the top ten were unique emerging best-practices. This study breaks new ground because a pragmatic soft systems business process analysis methodology is applied. Previous studies have applied quantitative economic analysis or qualitative case studies to identify the factors that are associated with high performing non-profits or effective performance of charitable organizations. Both of these categories of methods overlook internal business performance processes so the current study closes this gap by investigating the underlying factors that make non-profits effective in USA. The soft systems methodology applied in this study produces a visual model which facilitates the communication of best practices to stakeholders without requiring them to possess knowledge of statistics or industry benchmarks.
Keywords: Non-profit; effectiveness; business process analysis; soft systems method.
DO SOCIOECONOMIC CONTEXTUAL FACTORS INFLUENCE SMEs SERVICE QUALITY? A cross-sector and cross-city SERVPERF analysis
by Pedro Nascimento De Lima, Aline Dresch, Daniel Pacheco Lacerda
Abstract: There is an increasing body of knowledge on service quality relationship with many contextual factors, including culture, firm size, and public vs. private settings. However, local socioeconomic factors influence towards SMEs Service Quality is still unknown. We conducted statistical analyzes to observe the relationship between contextual socioeconomic factors of an SMEs city and its services quality performance using a SERVPERF survey database of more than 3,000 Brazilian SMEs. While Service Performance did not linearly correlate with the analyzed socioeconomic factors, a closer look at the data shows significant differences in Service Performance among groups of SMEs on highly developed and underdeveloped cities from the other cities. The paper discusses theoretical and managerial implications derived from these findings and proposes new research questions to generate data-backed knowledge to support SMEs service quality improvement. SERVPERF survey and socioeconomic data showed a weak linear relation of socioeconomic development towards service quality performance.
Keywords: SERVPERF; Service Quality; SMEs; Socioeconomic Factors; Brazil.
Competitive advantage and firm performance: the moderating effect of industry forces
by Jeen Wei Ong, Hishamuddin Ismail, Peik Foong Yeap
Abstract: This study aims to examine the moderating effect of industry competitive forces on the relationship between competitive advantage and firm performance. Previous researches have concluded that competitive advantage leads to superior performance but the impact is limited. A possible reason is that the economic value created by firms is appropriated by other stakeholders. This study hypothesises that the five industry competitive forces moderate the relationship. 517 usable responses were collected from small and medium enterprises (SMEs) in Malaysia to test the research framework developed. The results show that buyer bargaining power, supplier bargaining power and threat of new entrants moderate the effect of competitive advantage on firm performance. Surprisingly, SMEs with differentiation advantage and cost advantage are able to appropriate more economic value when the buyers and suppliers have strong bargaining power respectively. On the other hand, the threat of new entrants reduces the economic value that SMEs can capture.
Keywords: competitive advantage; firm performance; small and medium enterprises; SMEs; industry competitive forces; moderating effect.
Six Sigma tool selection to achieve goals in the short-term - a case study
by Guilherme Augusto Queiroz Schünemann Manfrin De Oliveira, Izabel Cristina Zattar, Robson Seleme
Abstract: Motivated by the idea that some quality tools interact in a better way among them than others do, the purpose of this paper is to analyse quality tools selection and combination, aiming at shorter-time DMAIC implementations through better-structured and straightforward tool selection. Based on a case study, this article explores the quality tools pre-selection. Through a literature review, the paper searches the available Six Sigma toolset, grounding the case study tool choice on previous studies. In this paper, a scrap reduction project of a Brazilian iron casting company was studied, where the team managed to implement a DMAIC process in two months, which resulted in benefits of approximately U$50.000,00 after the project implementation. There are several issues to be considered concerning the DMAIC toolset, especially about the criteria used to choose one or another tool. Thereby, specific combinations between quality tools can provide strategic advantages to organisations that develop DMAIC projects. This article might be of interest of many organisations' quality personnel, Six Sigma practitioners and management academics, as it details and gives theoretical support to some procedures onto implementing DMAIC cycles more promptly.
Keywords: Six Sigma; quality tool selection; define, measure, analyse, improve and control; DMAIC; Six Sigma toolset; short-term.
Strategic capabilities, niche strategy orientation and performance: a four-nation assessment
by John E. Spillan, John A. Parnell, Mehmet Ali Koseoglu, Erdal Akdeve
Abstract: This paper examines how strategic capabilities influence the niche strategy-performance link in Turkey, Mexico, China and the USA. Results suggest substantial differences across nations, industries and performance measures. The pursuit of a niche strategy orientation was a positive predictor of performance in all instances in which it was significant. In general, both management and technology capabilities were important drivers of performance, but results varied markedly across industries and nations and along return on assets (ROA) and sales growth as performance measures. Both technology and management capabilities were significant predictors of ROA in manufacturing and service industries in the USA, but no more than one category was significant in any of the final regression models for other nations.
Keywords: strategic capabilities; business strategy; performance; niche; focus; Turkey; Mexico; China.
Factors influencing employee performance: the role of human resource management practices and work engagement
by R. Krishnaveni, R. Monica
Abstract: This research explores and investigates the effect of robust human resource management (HRM) practices namely empowerment, competence development practices, rewards and recognition and work engagement on employee performance. A comprehensive model has been developed by taking into account the above mentioned constructs and has been validated in a developing economy. Though there is research focusing on HRM practices, work engagement and employee performance in a fragmented way, this research examines and explores the relationship between these variables in a cohesive way. The paucity in literature has prompted for this empirical study. Data has been collected from 205 IT program managers and from 41 senior managers using a structured questionnaire. Descriptive statistics and partial least squares-structural equation modelling were implemented to find out the factors that had the most impact on employee performance. Findings revealed that HRM practices namely empowerment, competence development practice, recognition and work engagement have emerged as prominent predictors of employee performance. This research is distinctive in respect to the comprehensive model that has been developed and validated.
Keywords: competence development practices; employee performance; empowerment; recognition; rewards and work engagement.
Impact of strategic roles of middle managers on the relationship between successful strategy implementation and organisational performance
by Fakher Jaoua
Abstract: Many researches have confirmed the importance of middle management involvement in strategy formulation and have demonstrated that middle managers have strategic roles which positively influence the relationship between strategy formulation and organisational performance. In line with these researches, this research aims to exploit the results of these researches, and test them on strategy implementation. It assumes that strategic roles of middle managers could have a positive impact on successful strategy implementation and thus on the relationship between successful strategy implementation and organisational performance. This general hypothesis was tested among a representative sample of 364 large Tunisian companies involved in the upgrading program. The results of the application of structural equation methods show that facilitating adaptability, implementing deliberate strategy and championing alternatives, except synthesising information, has not only a direct effect on the successful strategy implementation, but also an indirect effect on the relationship between successful strategy implementation and organisational performance.
Keywords: strategic management process; involvement of middle managers; strategy formulation; successful strategy implementation; SSI; strategic roles of middle managers; SRMM; organisational performance; structural equation model.
Identification of optimal initiatives for motivation enhancement of human assets
by Ahmad Ali Khaef Elahi, Rohhollah Hosseini
Abstract: The concept of motivation is typically the beginning point of cognitive process behind any behaviour. The aim of this study is to rank organisational motivational plans in terms of importance by collecting empirical data in three satellite campuses of a large university. In this regard, a field survey is conducted and organisational experts in each campus are provided a questionnaire. The collected data was analysed by using technique for order of preference by similarity to ideal solution (TOPSIS), simple additive weighting (SAW) and numerical taxonomy techniques. Then, a hybrid approach was used as it compensates the points of the weaknesses of the aforementioned techniques. The findings show that participative management style, job promotion and optimisation of compensatory system in the three campuses are the most important motivational action plans. Findings of this research contribute to both scholars and practitioners in enhancing the understanding of motivational plans in terms of importance, as well as the improved decision making on design and implementation of these plans.
Keywords: motivation plans; multi-attribute decision making; MADM; technique for order of preference by similarity to ideal solution; TOPSIS; simple additive weighting; SAW; numerical taxonomy; hybrid approach.