Characteristics of High Performance Organisations

de Waal, Andre, Journal of Management Research

1. Introduction

According to Colvin (2009) the world changed fundamentally in 2007 when the credit crisis hit, eventually causing the most severe recession since the 1930s (Colvin, 2009). A wave of trends and developments, like globalization (Lawrence, 2002; Bakker et al., 2004; Starbuck, 2005; Schuster and Copeland, 2006; Sirkin et al., 2008; Ramamurti and Singh, 2009), new technology (Sadler, 2002; Malone, 2003; Light, 2005), ascension of Asian markets and especially India and China (Backman and Butler, 2007; Kamdar, 2007; Nath, 2008; Nobrega and Sinha, 2008), environmental issues (Rosen, 2000) and demographic shifts (Rosen, 2000; Martin, 2002), was hitting the business world at the same time as the credit crisis was going on and thus helped to reshape the global business economy. Many authors (Kely, 2006; Charan, 2009; Flatters and Willmott, 2009; Guth, 2009; Hagel et al., 2009; Kotler and Caslione, 2009) agree with Colvin but not all. Main critic is Mintzberg who finds that little has changed in the activities of managers between the 1970s and 19902 (Mintzberg, 1973, 2009). Apart from using new tools like e-mail, managerial work remained essentially the same. Mintzberg in turn is supported in his opinion that the fundamentals of the global business economy have not changed by Tengblad (2000, 2006), Hales (1996, 1999, 2000) and several other researchers (Watson, 2001, Tolmie et al. 2003). It seems that there is no consensus among researchers on whether or not business fundamentals have changed, leaving as yet the following question unanswered: 'What organisational or business models might be proposed, whether existing in the past or at present or drawn from scratch, as potential solutions to the problem of designing the firm for sustainable high performance in changing circumstances?' (Freeman and Zollo, 2009).

To find an answer on this question, we turned to research into factors that may explain long-term success of firms and which can be used to develop a framework for building sustainable organisations. In the wake of the landmark book In Search Of Excellence (Peters and Waterman, 1992) and the bestsellers Built To Last (Collins and Porras, 1994) and Good to Great (Collins, 2001), there has been a strong interest among academics and managers in identifying these high performance factors (O'Reilly III and Pfeffer, 2000; Hess and Kazanjian, 2006; Porras et all., 2007; Thoenig and Waldman, 2007; Gottfredson and Schaubert, 2008; Simons, 2008; Tappin and Cave, 2008; Spear, 2009). Research into factors that cause or facilitate high performance is driven by developments in the resource-based view of the firm (Lockett et al., 2009) and the theory of dynamic capabilities (Peteraf and Barney, 2003; Easterby-Smith et al., 2009; Teece, 2009). In the literature on the resource-based view and dynamic capabilities many different factors are identified as potentially important for high performance. The type of factors found seems to depend on the angle of research or the personal views and interests of the researchers what characteristics are found that will lead to the creation of a high performance organisation (HPO). This makes it difficult to define a set of factors which describes the HPO in general. It is therefore imperative that a clear HPO framework is developed to allow generalization (Pearson et al., 2008). The aim of this study was to identify factors that determine HPOs irrespective of context (for example country, industry, type of organisation, time period). The research question was formulated as follows: What are the factors, derived from empirical study, which have a positive correlation with the performance of organisations? These factors can guide managers as to which actions to take to lead their organisations to superior results. The results of this study can be presumed to create Management Theory because they originate from design science-based research which has as a mission "to develop knowledge that the professionals of the discipline in question can use to design solutions for their field problems" (Aken, 2005, p.20).

This study contributes to management research as the described review is one of the most extensive of its kind and takes a different root than previous research. The broad-based design of the study consisted of the fact that it involved literature from many different scientific disciplines, including organisational psychology, human resource management and strategic management, and the fact that the resulting framework was tested at many different types of organisations all over the world (Deshpande et all., 2004; Aken, 2005). Much of the research on high performance so far has been done at US companies (Stadler, 2007), which may make the research results seem less relevant to management practice in non-Anglo-Saxon countries (Hofstede, 1980; Shao and Webber, 2006; Palrecha, 2009). This study distinguishes itself from these previous studies in that it, apart from North American studies, also included studies conducted in non-USA countries, and that the survey used in the study was administered to organisations in Europe, Asia, Africa and South-America). As opposed to many previous studies, no selection was made during this research as to the type of organisation, industry, country or time period to be studied, in order enable generalization. Many of the previous studies did not adhere to good scientific protocol because they beforehand explicitly made a selection of companies to study, thereby rendering the study outcomes of limited generic value (Niendorf and Beck, 2009; Resnick and Smunt, 2009). This article is structured as follows. The first section describes the literature review. The purpose of this review was to identify possible factors that may have a positive correlation with HPOs based on previous research. This is followed by a discussion of the empirical study that was performed to validate the factors found during the literature review. The results of the empirical study, that is the identified HPO factors, are described in the third section, and extensively discussed in the fourth section. The article ends with the conclusion in which the limitations of the research and suggestions for further research are given.

2. HPO research-Phase 1: literature review

The first phase, the literature review, consisted of selecting the studies on high performance and excellence that were to be included in the empirical study. Criteria for including studies in the research were that the study: (1) was aimed specifically at identifying HPO factors or best practices; (2) consisted of either a survey with a sufficient large number of respondents so that its results could be assumed to be (fairly) generic, or of in-depth case studies of several companies so the results were at least valid for more than one organisation; (3) employed triangulation by using more than one research method (for example a questionnaire and interviews) (Jack and Raturi, 2006); and (4) there was written documentation Containing an account and justification of the research method, research approach and selection of the research population, a clear analysis, and clear retraceable conclusions and results so that the quality of the research method could be assessed.

The studies to be reviewed were gathered by searching the databases of Business Source premier, Emerald and Science Direct, and by browsing the internet with Google using the following search words: high performance, excellence, financial performance, organisational results, high performing organisations, high performance managers, high performance workforce, accountable organisation, adaptive enterprise, agile corporation, agile virtual enterprise, democratic enterprise, flexible organisation, high-performance work system, high reliability organisation, intelligent enterprise, real-time enterprise, resilient organisation, responsive organisation, robust organisation, and sustainable organisation. In addition, books were reviewed, mainly on business and management. The literature search was conducted in 2007 and it yielded 290 studies which satisfied all or some of the four criteria. The studies were grouped into three categories:

A. Studies which satisfied all four criteria. These studies formed the basis for the identification of the HPO characteristics. Category A comprised of 105 studies.

B. Studies which satisfied Criteria 1 and 2 but not Criterion 3 and Criterion 4only partly , because although the research approach seemed (fairly) thorough there is no clear description and justification of the method used. These studies provided additional input for the identification of HPO characteristics. Category B comprised of 66 studies.

C. Studies which satisfied Criteria 1 and 2 but not Criteria 3 and 4, so there was no basis for generalizing the study findings. These studies were used as a reference to support the HPO characteristics that were identified in Category A and B studies. Category C comprised of 119 studies.

The content quality of the studies was not further evaluated because of the large number of studies (King and He, 2005). The 290 studies were summarized and put into two files by the author and two research assistants. The first file contained an overview of the studies that were reviewed, stating the (abbreviated) title of the research study, the author(s), the publication date, the research method(s) used, the research population, and the study category. To which category a study belonged was decided by the researcher who summarised that particular study. The study category was subsequently reviewed and approved by one of the other researchers. The second file described the research methods used, the research population, and the main findings of the study. In order to be able to classify the HPO characteristics, the framework of Kotter and Heskett (1992) was combined with that of Scott Morton (2003). These frameworks were used because their relatively simple set-ups made it easy to subdivide a large amount of information into factors. The Kotter and Heskett framework defined four factors which influence human behaviour in organisations: organisational culture; organisational structure (formal structure, systems, processes and policies); leadership of the organisation; and external orientation (competitors, public and legislative organisations). Scott Morton's framework enlarged the external environment factor by adding customers, suppliers and partners, and broadened the framework by adding a factor called 'individuals & roles' and by adding strategy, organisational design and technology to the organisational structure factor. Each factor in the resulting framework determined the degree in which organisational members exhibit performance-driven behaviour, which reflected whether the organisation was a HPO or not (Waal, 2004).

The identification process of the HPO-characteristics consisted of a number of steps. First elements were extracted from each of the 290 publications that the authors regarded as essential for high performance. These elements were then categorised in a matrix which listed all the factors included in the framework. Because authors used different terminologies in their publications, the elements were grouped according to similarity in categories under a factor and each group-later to be named 'characteristic'-was given an appropriate description. Subsequently, a matrix was constructed for each factor listing a number of characteristics. For the first 90 studies this process was reviewed and repeated by an external academic. The results of this academic review were extensively discussed with the author until agreement on the categorisation and the formulation of the characteristics was reached. Agreement was reached immediately in 95 percent of the cases, an additional 3 percent was reached quickly after clarifying some questions and mistakes, and the remaining 2 percent was reached after discussion. The outcome of the academic review provided sufficient ground to assume that the same categorisation process could be used for the remaining 200 studies. A total of 189 characteristics were identified. After that, the 'weighted importance' (i.e. the number of times a characteristic occurred in the individual study categories) was calculated for each of the characteristics. Finally, the characteristics with a weighted importance of at least nine percent were chosen as the HPO characteristics that potentially make up a HPO (see Appendix 1 for an example). Table 1 gives an overview of the resulting 53 potential HPO characteristics clustered in eight groups. The reference list with details about the 290 studies used in the review and the matrixes with the detailed scores have been documented in a white paper of 254 pages, which can be downloaded from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=931873. The research approach thus satisfied the 'criteria for good science' as given by Srnka and Koeszegi (2007): the data collection was performed in a systematic way, there was a structured procedure and documentation of the data analysis, and there were multiple person involvement and quality checks.

Table 1 thus provides the two hypotheses to be tested during the empirical study:

H1. The 53 potential HPO characteristics, identified during the literature review, all have a positive correlation with competitive performance.

H2. The 53 potential HPO characteristics, identified during the literature review, will occur in practice grouped in the eight factors from the ordering framework.

3. HPO research-Phase 2: empirical study

Phase 2 of the HPO research, the empirical study, was performed in two sub-phases. In Phase 2a, the 53 potential HPO characteristics were included in a trial questionnaire which was administered in 2005 during lectures and workshops given by the author in Europe and Africa. Purpose of the trail was to test the quality of the questionnaire and whether it was possible to find correlations between the characteristics identified during the literature review and the performance of organisations. The trial questionnaire yielded 116 respondents of 82 …

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Publication information: Article title: Characteristics of High Performance Organisations. Contributors: de Waal, Andre - Author. Journal title: Journal of Management Research. Volume: 4. Issue: 4 Publication date: October 2012. Page number: 39+. © 2009 Macrothink Institute, Inc. COPYRIGHT 2012 Gale Group.

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