Investigating the impact of organizational excellence and leadership on business performance: an exploratory study of Turkish firms

SAM Advanced Management Journal, Wntr, 2008 by Musa Pinar, Tulay Girard

Methodology

After reviewing the literature, the first step was to develop measurements and scales for the three organizational excellence factors and four leadership strategies in Figure 1. Initially, a series of statements were developed for measuring the three components of organizational excellence (care of customers, constant innovation, and committed people) and the four components of leadership strategies (attention through vision, meaning through communication, trust through positioning, and confidence through respect). Then, these statements were examined by two academicians who specialize in organizational excellence and leadership strategies. They were asked to evaluate each statement for its face validity and consistency with each component of organizational excellence and leadership strategies, and to suggest additional items, if needed. Following these expert suggestions, the improved statements were used in measuring each of the success factors based on their appropriateness, uniqueness, and ability to convey respondents' "different shades of meaning" (Churchill, 1979). The authors chose to develop their own scale items for each of the organizational success factors and leadership strategies rather than use previously developed scales. Despite the known benefits of the existing scales, the authors felt that the scale items developed for this study would measure the concepts proposed by Darling and Nurmi's (1991) framework.

[FIGURE 1 OMITTED]

This procedure, used to establish the face validity of the constructs (Churchill, 1979; Churchill and Iacobucci, 2005; Narver and Slater, 1990), produced 28 statements: 12 for organizational excellence factors and 16 for leadership strategies. The final survey instrument included four statements to be used in measuring each component of the three organizational excellence and four leadership success factors (see Appendix A for the complete list of items). The reliability analysis of the measurement items is discussed in the "results" section. Responses to these statements were measured on a 5-point Likert scale with 1 being "strongly disagree" and 5 "strongly agree."

To examine the impact of the organizational excellence factors and leadership strategies on organizational performance, the study included two groups of performance measures. The first group of three performance variables included profitability, market share, and growth relative to the firm's largest competitor (Narver and Slater, 1990). These variables were also measured on a 5-point Likert scale. The second group of four performance measures consisted of customer retention, sales growth, return on investment, and personnel turnover relative to the firm's largest competitor (Deshpande, Farley and Webster, 1993). These variables were measured on a 5-point scale with 1 being "much lower," 2 "lower," 3 "about the same," 4 "higher,' and 5 "much higher."

In addition, the survey instrument included demographic questions such as the type of industry in which the firm operates, the firm's exports as a percent of its overall sales, the number of employees, if the firm is ISO 9000 quality certified, and whether it has a foreign partner. These factors were used for profiling and comparing responding firms.