Burgess, T.F. and Heap, J. (2014), "Editorial", International Journal of Productivity and Performance Management, Vol. 63 No. 8. https://doi.org/10.1108/IJPPM-09-2014-0142
Emerald Group Publishing Limited
Article Type: Editorial From: International Journal of Productivity and Performance Management, Volume 63, Issue 8
Welcome to the final issue of Volume 63 containing seven papers; six standard papers and one reflective practice piece. As usual the papers range across a variety of topics – but all relate to productivity and performance management. The papers link to functional areas such as: operations, supply chain, accounting and finance, industrial engineering, and human resources. They also cover topics including manufacturing and service; private and public sectors; qualitative and quantitative analysis; developed vs emerging economies.
Many commentators profess that our society's economic dependence on supply chains has increased recently with influences such as globalisation. However, such increased dependence carries with it a greater risk of exposure to supply dislocation, for example when a supplier fails or their survival is simply threatened. The impact of the tougher economic times we live in has meant that such difficulties are more prone to occur. In the area of military and defence matters, the robustness of logistics supply chains is a major concern and reliance on suppliers is of critical importance. Against this background Emmanuel-Ebikake, Roy and Shehab point out the gap in our armoury of frameworks and tools to assess supplier sustainability; and they set out to fill this gap. They devise an approach that includes a decision support mechanism to help organisations assess supplier sustainability. This enables the design of more robust supply chains and, once the chain is assembled, enables the users to monitor supplier survivability and hence facilitate actions to avoid or mitigate against events that might disrupt the supply chain. The author's paper includes a case study that illustrates how their approach works. If, as some contend, supply chain management is the management challenge of our times, then this paper responds to that challenge by extending the manager's practical ability to better manage and improve the performance of supply chains.
In contrast to the above focus on supply chains, the second paper concentrates on the individual organisation and its financial performance. Quader and Dietrich apply stochastic frontier analysis to financial data spanning 28 years (1981-2009) for 1,122 firms listed on the London Stock Exchange. The authors use the lens of agency theory, i.e. the theory that managers of a firm, in pursuing their interests, may deviate from pursuing those of the owners/shareholders. They examine both performance as characterised by value maximisation, i.e. a strategic focus on the long run, and short run performance as represented by profit maximisation. In both cases the authors find evidence for firms underperforming due to management deviating from shareholders' interests and incurring extra costs (agency costs). The paper clearly contains a thorough piece of analysis, but the question of how the interests of stakeholder groups other than managers and shareholders figure in the bigger picture is left for another day.
In their conceptual paper, Yalley and Sekhon start from the position that services, despite the sector's burgeoning contribution to the economy, still lies in the shadow of the manufacturing thinking that dominates the literature. The objective of this third paper is to differentiate the "production" process for services from that for manufacturing; and to develop a framework that provides some insight in to service productivity. The authors would no doubt be among the first to agree that conceptualising production processes and productivity in services is a major and ongoing task. Let's hope that their contribution is one more step along the path to completing the task.
In the fourth paper Jajja, Brah, Hassan and Kannan apply structural equation modelling and hierarchical regression to survey data from 191 Pakistani organisations; and delve in to the topic of product innovation in an emerging economy. They confirm evidence for similar relationships in emerging economies as apply in more developed economies. Their study presents evidence for enhanced performance in product innovation arising from the buyer's innovation focus, the supplier's focus on innovation and the collaboration between the buyers and their suppliers. They also confirm innovation is boosted by foreign ownership, greater company age and involvement with exports. However, their sample is biased towards the larger firm and therefore the relationships in smaller organisations may differ.
If physical goods are the major items constituting the value flowing through a supply chain, then the policies on how inventory is stored and managed throughout the nodes and different levels of the chain determine its overall performance. However, analysing the combination and interaction between the various policy options is not that easy. Similarly assessing chain performance is not just about cost, other aspects such as speed of response and service levels make this a complex situation to analyse. In this paper Sharma and Sisodia set out to systematically analyse a three-level supply chain and use a choice of three different inventory policies at the various levels. They take in to consideration the issue of sub-optimisation by exploring optimisation at different levels in the chain. Their straightforward, quantitative approach to modelling the supply chain provides some useful insights in to managing the performance of a supply chain. Given the complexity of the topic their contribution is welcome.
In the sixth paper Jarkas, Radosavljevic and Wuyi concentrate on construction work. Such work is carried out across the globe and in some places, such as Qatar, a spike in activity is creating a significant economic impact. In such situations, the productivity of project managers is a key economic factor. In this study, the authors carried out a questionnaire survey to examine the factors that demotivate project managers and thus reduce their productivity. The survey found the primary factors to include insufficient financial incentives, a slow information flow and extended decision-making processes. Clearly, as the authors point out, one of the key aspects of this survey is its context. The surge in construction activity relies on importing foreign project managers – often with different cultural backgrounds to that native to Qatar. This placement of the foreign managers in an unfamiliar context exacerbates primary motivations that relate to remuneration; hence the perceived inadequacy of monetary rewards is a key demotivating factor. The authors make some interesting observations about how work values, and therefore productivity, in construction may be different from those that apply in a factory or office.
The last paper, a reflective practice piece, contains a "cri de coeur" that relates to the current structuring and management of power utilities. Letsoalo outlines his view of an industry that is hostage to economic short-termism. Next he puts forward an approach to managing a power utility that is underpinned by focusing on a productivity accounting methodology. The author makes many salient points, and leads one to muse: "how does our society get to the situation where common sense principles are ignored?" Perhaps, the (unresolved) financial crisis of 2008 demonstrates the depth of the problem that power utilities and many other industries face.
T.F. Burgess and John Heap