Investigating the causal link between a management improvement technique and organizational performance

Abstract

Purpose An important question in contemporary research is: do certain management practices cause better performance or do better performing organizations find it easier to adopt certain management practices? This question is also of importance when applying the high performance organization (HPO) framework, which is a scientifically validated technique designed to achieve and sustain a high level of performance. Many research studies correlate the HPO framework with improved organizational performance. There are, however, no studies which explicitly look at the causal relationship. This paper aims to provide empirical evidence of causality. Design/methodology/approach Longitudinal research was conducted at two companies. An HPO diagnosis was conducted at each company, after which management implemented the HPO framework. Two units at each company were selected as case studies. Data were collected, using a questionnaire and interviews, at the beginning and after 18 months, when the diagnoses were repeated. A linear regression analysis was performed to interpret the data. Findings Despite exposure to the same HPO framework techniques, organizational units achieved significantly different outcomes. In each company, one unit achieved a higher HPO score and higher organizational results, while the other unit had no change, or a lower HPO score and lower organizational results. The key factor was the manner in which unit managers applied the HPO framework. Practical implications Optimal effectiveness for the HPO framework occurs when management incorporates the HPO factors into the workplace and strives diligently to improve performance. Originality/value This research responds to the question “Do certain management practices cause better performance or do better performing organizations find it easier to adopt certain management practices?”