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The validity of world class business criteria across developed and developing countries

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dc.contributor.author Parker, Andre John
dc.date.accessioned 2008-06-26T08:57:19Z
dc.date.available 2008-06-26T08:57:19Z
dc.date.issued 2008-06-26T08:57:19Z
dc.identifier.uri http://hdl.handle.net/10210/734
dc.description.abstract The impact of globalisation continues to divide economies around the world into fast and slow moving economies. The former are producing wealth at an exponential rate whilst the latter continue to lag in their wake. The pace of change and challenges of the 21st Century have left business organisations no choice but to attain levels of operational excellence and fitness to compete with their counterparts in a demanding boundaryless global arena. Irrespective of whether they are global or local, organisations ascending to world class have a ‘global mindset’ which means that they see the rest of the world as their benchmark. These organisations know that good is never good enough and that the glory of being ahead in the race is but a fleeting moment in time. The performance gap between South Africa, classified as a ‘slow’ Developing economy and that of ‘fast’ Developed economies continues to widen. Organisations in Developing countries like South Africa have been slow to embrace performance-enhancing Criteria practised in world class organisations, and where they have been embraced, the success rate has not been encouraging. The motivation for the study was to provide relevant guidelines to organisations in developing countries, in particular South Africa, towards the design and implementation of organisation interventions that will find traction and are sustainable to become world class - and in so doing, the variables making up the contextual backdrop which constrain or enhance an organisation’s pursuit of becoming world class would be assessed for relevancy and improved understanding. Furthermore the study would re-direct and re-channel the study of world class Criteria in driving high performance in Developing countries as being unique in need, combination and formulation. Authors on what constitutes this ‘global mindset’, with few exceptions, adopt the view that the world class Criteria that make good organisations great are the same around the world. The problem propositioned and addressed in this study is that what is understood and practised as performance-enhancing world class Criteria, may not apply equally and may not be equally successful in Developed and Developing countries respectively. Restated as a research question, The validity of world class business Criteria across Developed and Developing countries was re-formulated as follows: Firstly, how do world class Criteria which result in high performance in Developed countries differ from those applied in Developing countries? Secondly, what can organisations in Developed countries, in particular South Africa, learn from these differences to embrace best Practices that work and are sustainable for their respective environments? The research objective was to identify world class Criteria that are unique to Developing countries and to add value to organisations in Developing countries to ascend to world class by developing ‘road maps’ for continuous improvement that are valid within Developing country context. The direction of the research process and methodology was determined by the choice of the researcher between a quantitative, qualitative, or a combined qualitative-quantitative approach. Complete and objective data related to the research question within the research domain needed to be collected from individual participants in business organisations across the divide of countries and cultures. Uniformity and control of the data collection method were necessary to minimise the likelihood that different cultures within different business organisations within different country cultures could interpret the survey data differently. A uniform quantitative research approach which presented the same qualified statements in a consistent manner with a consistent response methodology was therefore chosen to ensure that all respondents were likely to understand the survey in the same way. The Proposition tested is that the Criteria for organisations to ascend to world class differ across the divide between Developed and Developing countries. The implications of this Proposition are that whilst there are world class Criteria that are universal across global boundaries, world class organisations in Developing countries, with particular reference to South Africa, have evolved their own set of world class Criteria that are unique to Developing countries. By ignoring the contextual backdrops within which Developed and Developing countries operate, appropriate learning for organisations in Developing countries to ascend to world class competitiveness is constrained. A web-based touchbutton survey questionnaire was designed for instant internet access to assigned and authorized respondents. Organisations considered world class in both Developed and Developing country context were approached to participate in the survey. Participants up to four reporting levels from the president/chief executive officer of the organisation were nominated by an appointed person in a participating organisation responsible for the survey. Email addresses provided by participating organisations were used to log participants on to the survey. Progress was monitored electronically on a daily basis. Since the survey design required that participants complete each part of the survey before proceeding to the next part, the possibility of incomplete data was eliminated. Data capturing took place in real time on a dedicated web site on an MS Office Excel spreadsheet as respondents responded on line. Five surveys completed on paper were fed manually into the data base. All data was therefore complete and ready for analysis at the time of closing the survey for further participation. The biographic data on individual respondents contained the following key features: 41% from 3rd reporting level in their organisations; 65% having more than 3 years’ experience in their organisations; 83% having been with their organisations for more than 3 years and 79.2% having a tertiary qualification. The qualifications and overall experience of the majority of respondents provided for a reasonable assumption that the sample could be relied on to provide well informed and therefore highly valid data. An overall individual response rate of 427 out of a possible 560 respondents was achieved, constituting a percentage response of 76.3%. Developed countries constituted 29% of the responses against 71% from Developing countries whilst organisation response ratio constituted 50 % (20) and 41% (14) respectively. The individual response rate from Developing countries was twice that of Developed countries. The response rate at organisation level presented a more balanced ratio of 59% Developed and 41% Developing country ratio. Organisations and respondents over Developed countries were well spread over several countries. Primary and secondary organisations were closely balanced within Developed and Developing countries respective responses. Countries surveyed were Belgium, France, Germany, Honduras, Hungary, Ireland; Italy, Namibia, Netherlands, Portugal, Russian Federation, South Africa, Spain, Sweden, Switzerland, United Kingdom and the USA. An equal number of 11 organisations from Developing and Developed countries respectively qualified for analysis. This amounted to 22 companies surveyed in all. In the exploratory part of the study the difference between Primary and Secondary sector organisations was found to be small and it was decided to abandon this distinction for any further analysis. An Exploratory Factor Analysis identified the relationships between the underlying Factors in their own right, ignoring the prior literature-based theoretical structure of 7 world-class Criteria with their related Practices. A Confirmatory Factor Analysis sought to confirm whether the extent to which the 7 world class Criteria and their related Practices as reported on in the literature review, and built into the survey instrument, actually did exist. Eighty-five point seven per cent of the Practices in the study could be confirmed in the literature reviewed, leaving 14.3% of the Practices unconfirmed. The implications of this finding are that not all world class Practices are applied consistently all the time by all organisations purported to be world class or who are ascending to becoming world class. Three Schools of Thought about the validity of world class Criteria over Developed and Developing countries emerged, each with its own set of implications and results. School of Thought One postulated that One size of world class criteria fits all, irrespective of Developed or Developing country context. However, no evidence could be found to support this ‘absolute’ School of Thought. Consequently this School of Thought had to be rejected. School of Thought Two postulates that Combinations of Criteria and their associated Practices are exclusive to Developed and Developing Countries In support of this postulate, two Exploratory Criteria (Performance and reward driven people and Customer-centric, shared vision driven leadership) and two Confirmatory Criteria (Ongoing stretch and future-driven strategising and An enabling and empowering people philosophy and practice) showed significant differences between Developed and Developing countries. In all instances of difference, the extent of practice in relation to each Criterion favoured Developed country organisations. The implication of this finding is twofold: Firstly, is that the School of Thought propagating that Combinations of Criteria and their associated Practices are exclusive to Developed and Developing Countries had to be accepted. Secondly, is that Developed Country organisations embrace the identified Criteria to a greater extent than their Developing country counterparts. This finding has a further implication in that it provides a notable explanation why organisations in Developed countries on the whole, outperform their counterparts in Developing countries. The practical significance of this implication has been built into a proposed empirically reconstituted world class model with ‘road maps’ for organisations in a Developing country like South Africa . Further to School of Thought Two, Extent of practice by importance revealed that the Practices: Leadership driving continual change; Core capabilities that enable business processes are built through ongoing learning; Innovative ideas born by working close to customers and suppliers are more important to Developing than Developing Countries: The implications of this evidence, and the reasons given, are that at practice level these three Practices are more important in Developing countries more as a matter of necessity and survival in a Developing Country context than groundbreaking forward-forging ways of doing business. en
dc.description.sponsorship Prof. Theo H. Veldsman en
dc.language.iso en en
dc.subject Organizational change en
dc.subject Industrial management en
dc.subject Business enterprises en
dc.subject Business planning en
dc.subject Leadership en
dc.title The validity of world class business criteria across developed and developing countries en
dc.type Thesis en

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