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.
Prof. Theo H. Veldsman