An empirical investigation of the critical linkages among best practice factors and their impact on business results

Ismail Sila, University of Rhode Island

Abstract

The purpose of this study was to investigate the relationships among 7 best practice factors and their impact on business results using survey data from 286 manufacturing and service companies. Using a thorough review of the literature to identify the nature of the bivariate relationships among these factors, a total of 23 hypotheses were formulated. A full latent variable model based on the 23 hypotheses, as well as three alternative models were tested using data from 286 companies to identify the best model that explains the relationships among the 7 best practice factors and the business results factor. Testing and comparison of the four models hypothesized showed that a slightly modified version of the full model fitted the data best. Twelve of the 23 bivariate relationships originally hypothesized were statistically significant. There were a total of 13 significant direct paths in the model. Based on the final model, direct and indirect effects among factors, as well as indirect effects between factors and indicators were calculated and compared to the results of other studies. Leadership and information and analysis turned out to be the two factors that had the biggest impact on the best practice system. A direct effect from human resource focus to supplier management, which has been largely ignored in the quality management literature was the most significant of all the bivariate relationships among factors that were statistically significant. The only factors that had a direct effect on business results were leadership and process management. Leadership was the only factor that had both a direct and indirect effect on business results. In addition to information and analysis, the only other factor that solely had an indirect effect on business results was human resource focus. Implications of the study for managers, researchers, the Malcolm Baldrige National Quality Award, and the Australian Manufacturing Council's definition of best practice are also discussed. ^

Subject Area

Business Administration, Management

Recommended Citation

Ismail Sila, "An empirical investigation of the critical linkages among best practice factors and their impact on business results" (2002). Dissertations and Master's Theses (Campus Access). Paper AAI3078003.
http://digitalcommons.uri.edu/dissertations/AAI3078003

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