Interrelationships among management practices, and their effects on organizational performance

The purpose of this paper is to examine interrelationships in the usage of four management practices, and how usage of these practices, individually and in combination, is related to multiple dimensions of organizational performance. Of the studied practices, two are operations management (OM) practices: total quality management (TQM) and just-in-time (JIT); and two are performance measurement (PM) practices: value-based management (VBM) and the balanced scorecard (BSC). A dataset of survey responses from 191 Dutch, medium-sized manufacturing firms is analyzed to examine the interrelationships, to identify the dimensions of organizational performance, and to test for relationships between the (combinations of) practices and the dimensions of organizational performance. In terms of their usage, four significant combinations of practices are identified: both TQM usage and VBM usage are significantly conditionally associated with usage of both JIT and the BSC. Also, although each practice is found to be individually related to at least one dimension of organizational performance (i.e., to performance in terms of accounting return, innovation, human resource management and/or product market measures), several of these relationships are found to be stronger and/or more nuanced when certain practices are used in combination.