The Study of Best Management Practices in Sri Lanka's High Performing Companies

Article excerpt

From a methodological point of view, the study of best management practices provides an interesting inductive method for those who wish to get closer to the art and science of managerial practice. In a sectoral sample of 40 large and successful companies in Sri Lanka, a group of researchers surveyed the current management practices and how they contributed to company performance. This paper summarizes the conceptual, methodological and operational aspects of the study on the five best management practices.


The pace of investigation into best management practices in companies world around has quickened significantly over the past several years. Started around 1982 with the publication of lessons from America's best-run companies by Peters and Waterman Jr. in their In Search of Excellence the intellectual curiosity about managerial factors behind business success continued to grow particularly because most of the 'best-run' companies in the American sample did poorly towards the end of the decade. In increasingly competitive markets, local and global, the role of best management practices of companies is both contextual and time-bound (Hiebeler, Kelly & Ketteman, 1998:28). A Development Dimensions International study in 1998 showed significant differences of best management practices between Asian companies and those of the rest of the developed world (Dalesio, 1998). More interestingly, a recent study of Sri Lanka's international competitiveness concluded that while the country's overall economic performance wa s above the Asian average (Sri Lanka's score was 80 against the score of 73 for Asia -- excluding Japan & NICs) its international competitiveness index was much lower than the average for the same Asian group of countries (Sri Lanka's score was 34 against Asia's 45) (PriceWaterhouseCoopers, 1998). How does an economy, an open market economy like Sri Lanka's, continue to maintain a reasonable rate of growth performance without demonstrating business competency in competition? In many dimensions, Sri Lanka's performance has been paradoxical: high quality of life with low level of productivity; high level of literacy and education with low level of employment and high level of political instability with a stable democratic system of governance. Therefore, it would be of interest to the international business, professional and academic community to see how leading business companies in this Island nation of paradoxes manage their affairs.

This paper describes how the study of best management practices in Sri Lanka was designed and implemented. In November 1997, a group of academics from the Postgraduate Institute of Management (PIM), Colombo met with representatives of the business community in order to find out the development priorities of the private sector of Sri Lanka. The objective of this discussion was to discern private sector expectations about management education in the country and, thus, to reflect upon the educational and extension work plans of the Institute. The idea of best management practices emerged after a discussion on a basic question that was raised in the deliberations, i.e. What are we good at? The discussants knew or presumed that Sri Lanka's management practices even in the most 'successful' companies were not favorably compared with any of the world-class management practices. Or simply because of such a belief that Sri Lanka has to leap-frog in improving managerial performance, it was concluded that a systematic study of the private sector's managerial performance be undertaken by the Postgraduate Institute of Management.

A word about the politico-economic environment of Sri Lanka's business at the time of the study (1998) is pertinent. Domestically, Sri Lanka's government is committed to support the private sector, which accounts for about 65% of the national economic activity, as the engine of nation's economic progress. This commitment, however, is severely handicapped by the government's long-standing involvement in the civil war with separatist rebel groups in the Northern and Eastern provinces of the country which costs the government in the range of 20% of its annual budget. …