Showing papers in "British Journal of Management in 1993"

Outcome‐related Performance Indicators and Organizational Control in the Public Sector1

Abstract: SUMMARY There is increased interest in the widespread dissemination of outcome performance data to secure enhanced strategic control of public sector organizations. This paper adumbrates the rationale for such schemes, and outlines the potential distortions induced by excessive reliance on outcome-related performance indicators, inferred from experience in the management control and Soviet literature. The paper gives an outline of the performance review process in the United Kingdom National Health Service, and presents the results of a case study of the impact of the publication of outcome performance data in the maternity services. The research detected many of the expected distortions arising from reliance on performance indicator schemes, and concludes that they may have significant dysfunctional consequences. The paper does not however advocate the abandonment of performance audit in the public sector. Instead, it warns that great attention should be given to the managerial incentives implicit in any strategic control scheme, and that the style with which the scheme is applied will have important bearings on its effectiveness.

Generic Strategy and Performance: an Empirical Test of the Miles and Snow Typology

Abstract: SUMMARY Previous research has considered the strategy-performance relationship in industries of relatively low degrees of dynamism and volatility. This study empirically tests the Miles and Snow typology with a dynamic, growing and volatile service industry. Results support earlier research and suggest that, considering catalogue and mail-order houses (SIC-5961), reactors did not perform as well as businesses adopting other generic strategies. However, prospectors experienced significantly higher levels of revenue growth than other businesses. Further, analysers were significantly more profitable than businesses adopting other strategies. These results suggest that combination strategies are a viable means for sustaining competitive advantage.

Organizational form, ownership structure and corporate performance: a contextual empirical analysis of UK companies

Abstract: This paper contributes to the literature on organizational form and performance (the performance-conduct paradigm) by examining the impact of two sets of variables that have not been examined previously: measures of environmental uncertainty and alternative forms of controlling separation of ownership from control. The paper first examines the extent to which contextual variables such as perceived environmental uncertainty and age of the organizational form moderate the relationship between organizational form and corporate performance. Next, the paper extends the analysis by examining the possible effects of ownership and control structures on performance. Measures suggested by agency theory, such as conventional ownership proxies (i.e. proportion of shares held by identifiable, homogenous groups), the proportion of non-executive board members and Fama and Jensen's concept of separation of decision management from decision control are used in the analysis. The results indicate that these measures have direct impact on corporate performance in their own right, though the main impact is indirect through interactions with organizational form variables.

The Adjustment of Japanese Expatriates to Living and Working in Britain

Abstract: SUMMARY Ninety-one Japanese managers and professionals on international assignments in the London offices of trading houses and insurance companies responded to a wide-ranging survey on work and non-work adjustment. Dependent variables included standardized measures of adjustment, well-being, mental health and modes of adjustment (personal change and role innovation). In comparisons with samples from other studies, the expatriates experienced lower work well-being and mental health, and, compared with a sample of United Kingdom domestic job changers, engaged in less role innovation but recorded higher personal change, especially in their values. Predictor variables, including predeparture experience, family factors, self-rated job performance, self-efficacy, work-non-work spillover, social interaction and perceived company purpose in the assignment, were found to be differentially related to outcome measures. A new method of retrospectively recording changes in feelings over time in the work and non-work domains was also applied, supplying tentative evidence for a negative shift in affect on arrival, especially in the non-work domain, and a further fall after arrival, especially in the work domain. In most cases, this latter dip was followed by a recovery, providing some evidence in favour of the U-curve hypothesis. Implications for theory and practice are reviewed.

Action Learning - A Paradigm in Emergence: the Problems Facing a Challenge to Traditional Management Education and Development

Abstract: SUMMARY This paper examines the proposition that action learning is a new paradigm in management education. Action learning is becoming widely accepted methodology for the development of managers and managerial competence. This is in both public and private sector organizations and within the context of certificated and organisationally based programmes. The paper seeks to use Kuhn's work on the nature of paradigms and change as a way of explaining the increase of interest in his approach. Importantly, although this approach promises to answer some of the problems of traditional management education, it is not without its own critics. Kuhn's criteria for a paradigm change are explained with reference to action learning literature and knowledge of practice. From this a framework is developed that compares a traditional approach to management education with an action learning approach on three levels. Our conclusion is that action learning is a new paradigm, but for the maximum benefit to be gained from the approach its application needs to be more carefully considered, particularly in relation to the provision of some wider external frameworks for the manager to use as‘tools for thinking’

Managerial Self-efficacy and Managerial Performance

Abstract: SUMMARY Some of the main features of Bandura's self-efficacy concept are presented. The importance of the concept to the work organization and to individual performance is discussed. A field study is described. The first part of the study involved the development of parallel versions of a scale to assess managerial self-efficacy. Data concerning the psychometric properties of the parallel version of the scale show that they are reliable and independent of social desirability. The second part of the study provided evidence of the relationships between scores on the managerial self-efficacy scale and supervisors’ ratings of managers’ performance. The results indicate that managerial self-efficacy correlates with work performance ratings.

The Market Provision of Management Services, Information Asymmetries and Service Quality—Some Market Solutions: an Empirical Example

Abstract: SUMMARY This article examines the problems of information asymmetry associated with the market provision of managerial services. Such problems are heightened by those characteristics which differentiate services from goods. Two unique, and central, characteristics of services, are intangibility and perishability. These create special problems for the market provision of services. In particular they make for difficulties in assessing quality; whereas the producer may know product quality, the buyer often does not. The asymmetry between sellers and buyers is of two types: Adverse selection and moral hazard. Adverse selection occurs when the buyer cannot observe the relevant characteristics of the seller or the conditions under which they work. The problem of moral hazard is the buyer's inability to observe the action taken by the sellers. If these difficulties are not overcome, the market could collapse as companies withdraw and internalize service provision. However, each market has a number of in-built mechanisms which remedy the harmful effects associated with information-related problems. The institutional arrangements which predominate in particular markets are dependent upon the trust-producing mechanisms within those markets. Consequently, market responses to information asymmetries are far from uniform. The argument is illustrated using the example of the executive recruitment industry. In this respect the paper is a highly focused study of those mechanisms which overcome information asymmetries in one service market.

‘It's a Very Foreign Discipline’: the Genesis of Expenses Control in a Mutual Life Insurance Company

Abstract: SUMMARY This paper is drawn from an intensive case study of Pensco - a mutual life insurance company in the South of England. The original objective of the research was to examine corporate strategy as an aspect of management control. As the research proceeded, it became clear that a new system of budgeting and expenses control was a crucial element of the transformation of the company from its 'sleepy’ paternalistic traditions into an aggressive, competitive financial services company. The paper contextualizes the development of budgeting and expenses control in Pensco within changes in the British economy. These are associated with the rise of the New Right, transformations in the financial services sector relating to deregulation and the establishment of a new regulatory framework. The argument of the paper is that budgeting and accounting control in this company has a complex genealogy revolving around a number of conditions coinciding at a particular point in time. Our case study material also reveals a variety of tensions, contradictions and resistances to the new management regime that placed, considerable obstacles in the way of an effective implementation of the new accounting and management controls

Fitting Management Control Systems to Competitive Advantage

Abstract: SUMMARY Recent publications suggest that existing management accounting and control systems prevent business unit managers realising their desired competitive advantage. Although the concept of competitive advantage has already been thoroughly discussed in strategy literature, it has not yet been integrated in the management accounting and management control frameworks. Only a limited number of researchers have concentrated on contingency research in this area. Contingency theory simply states that organization structure, process and management control systems are contingent upon various internal and external factors, such as industry, technology, size, culture and strategy (Anthony and Young, 1988; Anthony et al., 1992). This article is an attempt to identify and investigate the management control – strategy relationship. We report the results of our exploratory field research in 18 companies (32 business units). Based on our results, we formulate some hypotheses on the observed characteristics of the management control process in case of low-cost strategy, differentiation strategy in a standard product environment and differentiation strategy for customized products (make to order, engineer to order).

Innovation and Organizational Learning: the Case of Computer‐Aided Production Management

Abstract: SUMMARY Recent experience of unsuccessful implementation of integrated advanced manufacturing technology suggests that much of the problem is due to a lack of innovation in organizational in parallel with the technological dimension. Discussion of this issue argues the need for some kind of ‘organizational learning’ to obtain the full benefits of AMT. This paper reviews the topic of organizational learning in technology and explores its relevance to the problem of AMT implementation through the case example of computer-aided production management systems.

Strategy and Human Resource Management Integration in Fast Growth Versus Other Mid‐sized Firms1

Abstract: SUMMARY The nature and integration of strategy and human resource management practices, and the effects of such integration on firm performance were examined in two groups of mid-sized flrms: fast-growth firms and a random sample of similar sized mature firms. The results indicated that the fast-growth firms emphasized fewer human resource activities and experienced a lower degree of strategy-human resource integration than the mature firms. Some evidence was found that the relation between the level of integration and firm performance was moderated by the organization's stage of development.

A Two‐Decade Test of Product Life Cycle Theory

Abstract: SUMMARY The product life cycle (PLC) has represented a central element of marketing theory for four decades. Following its development in the 1950s, and its subsequent popularization in the 1960s, it has remained a stable feature of marketing teaching; despite evidence of its limited applicability and the growing awareness, amongst leading academics at least, of its flawed nature. This paper critically re-examines its practical value in the light of the 20-year history of 929 brands spread across 150 fast-moving consumer goods (FMCG) markets in the UK. The main conclusion is that the ‘life cycle’ of the brand leaders is indeed more stable, and much longer, than some of the previous work might have suggested; and that the PLC would have predicted. As a credible aid to marketing decisions the brand life cycle is, therefore, of little value in the majority of FMCG markets - and cannot justify its long-held position as a theory that has general practical applicability across the whole field of marketing.

Management Control Systems: One View of Components and Their Interdependence1

Abstract: SUMMARY Professor Robert Anthony's statement that ‘control is the process of assuring that the organization does what management wants done’ implies that systems for management control must be broadly conceived This paper takes the view that a comprehensive view of control systems should include at least five components: performance measurement, strategy, organization structure, direction and motivation Each of these components reflects management choices, but those choices have implications for the other components A strategy of dynamic new product development for example, requires a flexible structure, and should have performance measures that relate to the structure and the desired achievements for that strategy As what is measured signals what is important, the measures provide direction and the basis for incentives and rewards The interdependence of the components is seen as a key factor in control system design When the components support each other, the interdependence is a source of strength; conflict or even absence of support among the components can be a source of weakness This paper describes the components and illustrates ways in which the design of control systems needs to recognize their interdependence The process of system implementation is also reviewed, as process choices can be independent of design choices The framework is related to prior research and writing, showing that the components are themselves complex and have been the focus of extensive study Finally, several teaching cases are decribed in order to show how the design issues may appear in practice and how the framework can be used to help teach management control systems

Managerial Career Development Programmes: Effectiveness, Availability and Acceptability

Abstract: SUMMARY Though there have been many prescriptive accounts of career development procedures and techniques, there has been little systematic research into how extensive their use is in Britain, how effective they are, or how participants in such programmes react to them. Following a review of the availability, effectiveness, and acceptability of such programmes, we report the results of a survey of 120 British managers undertaking a distance-learning Master of Business Administration programme. In particular, findings are presented concerning the availability and usage of a range of such procedures and respondents' reactions to them in terms of their perceived fairness and usefulness for personal, organizational and career development. These studies help to identify features that characterize well-received career development programmes.

Managers' Perspectives on Making Major Investment Decisions: the Problem of Linking Strategic and Financial Appraisal

Abstract: SUMMARY Major investment decisions are an important factor shaping strategic change in complex organisations. Traditionally, they have been primarily regarded as the domain of financial theory, with a few notable exceptions. This paper explores how the apparent gulf between strategic and financial appraisal of major investment decisions can be bridged. The approach taken in this research study was to explore linkages between strategic and financial appraisal from managers' own perspectives. These perspectives were examined through a learning process. This enabled managers to reflect and debate on their experiences and issues - upon both strategic and financial theory(s). Unlike many prior studies, this research took a qualitative approach to data analysis and interpretation. This yielded a range of insights - some of these amplified findings in earlier research studies; others suggested a more radical shift in thinking on strategic/financial appraisal linkages towards a closer fusion of the two disciplines.

Performance Related Pay in Practice: A Critical Perspective1

Abstract: SUMMARY This paper discusses the use of performance related pay (PRP) as a means of control over the relationship between effort and reward. Taking a critical perspective, it describes how the implementation of PRP in a UK-based electronics company has been used as a device to remove trade union influence in wage-setting arrangements and to effect changes in employee behaviour. The opinions of supervisors, line managers, personnel managers and shop-floor staff are discussed and the implications for management control are assessed. The paper concludes that from management's perspective the PRP system appears to have been a success, for it has in some cases ‘commercialized’ the relationship between effort and reward, and has pre-empted expressions of employee resistance.

The Formation of Top Managers: a Discourse Analysis of Five Managerial Autobiographies

Abstract: SUMMARY What do top managers see as the root of their success? This paper reports on a discourse analysis of five autobiographies from major industrial figures. Those chosen all had some disruption (war, being a refugee, or immigrant status) between the culture of their childhood and the culture in which they undertook their careers. This makes them more aware than most of their upbringing. Their accounts of their first 20 years are examined, and themes are drawn out for each of them. These themes are tabulated and some of the differences between them are discussed. Common themes are conspicuous by their absence. The paper discusses why this should not surprise us; top management is not one activity in one culture, and an upbringing that might have led one of these managers to success might have been disadvantageous to another. The paper concludes that the common factor between the accounts of the managers is that they all regard their upbringing as having fitted them particularly well for the company, industry and culture in which they were eventually successful.

Accounting and Conceptions of Control in the American Corporation1

Abstract: SUMMARY This study examines three conceptions of how capitalist firms are organized and the relationship between accounting, organization, and control. The first conceptions is based on neoclassical economic theories, and its central premise is the efficacy of contracts. The second model emphasizes Marxian ideas of class conflict and exploitation. Its organizational premise rests on hierarchy and accumulation. The third concept is sociological. Its core assumption is that firms act to create ‘organizational fields’ which assure their continued survival. Each of these three perspectives relies on accounting as a means of control. The paper argues that there is an institutional connection between accounting and corporate control; the connection is demonstrated by the way in which accounting legitimizes control through objectivity, methodology, and professionalism. Regardless of how control is theoretically conceived, accounting is a crucial aspect of control within the modern economic organization.

Patterns in Cross Shopping for Groceries and their Implications for Co‐operation in Retail Location

Abstract: SUMMARY One determinant of the success of a retail outlet is its location The location strategies adopted by many retailers of convenience products, including those marketing groceries, have been based upon the principle of siting stores away from competition Recent moves by leading grocery retailers to develop out of town and other sites jointly, where they would trade side by side, mean that methods are needed to appraise the selection of location partners to supplement or replace traditional, spatial analyses A method based on similarity of image and cross-shopping behaviour is proposed and tested on two substantial data bases A concept, drawn from theory on brand switching, that customers would treat outlets seen as similar in a similar way, is found not to apply to source switching Source switching behaviour is found instead to vary with the source itself, according to two distinct patterns In one, shoppers cross shop more to retailers perceived to be similar; in the other, shoppers cross shop more to retailers perceived to be different The strategies currently adopted by four grocery retailers in joint site development are appraised against the model of source switching that can be defined from these patterns Some location alliances are predicted to be potentially more valuable to one partner than another both in the short and long term The anomalies identified in the selection of location partners are analysed by reference to concepts drawn from the literature on co-operation Two different types of relationship exist between the various retail partners; a longer term alliance at each site and shorter co-operation between head offices It is suggested that the nature of the second could prejudice the outcome of the first

An Industry‐specific Study of Factors Contributing to the Maintenance and Longevity of Quality Circles

Abstract: SUMMARY Lawler and Mohrman (1987), as others (Griffin, 1988; Marks et al., 1986), have associated a‘honeymoon effect’ (Lawler and Mohrman, 1987) or period of‘initial momentum’ (Solberg, 1985) with quality circle (QC) progress. They have been shown to be successful for about 2 years before there is a decline (Griffin, 1988). Focusing on a single synthetic rubber manufacturing facility, individuals who had participated in QCs at the site were surveyed. Because the QC programme had been in place for 7 years, this study sought to determine what factors contributed to that longevity

John Stuart Mill – Contributions to the Principles of Managemen

Abstract: SUMMARY Although John Stuart Mill was a senior officer in the East India Company (EIC), he is best known for his outstanding contributions to economic and political thought during the 19th century. Close analysis of his writings and career in the EIC also reveals an important contribution to the evolution of management thought.