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Effect of best management practices on the performance and productivity of small firms

Nisar, Tahir M.; Kumar, Niraj; Prabhakar, Guru

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Authors

Tahir M. Nisar

Niraj Kumar



Abstract

© 2019, © 2019 Informa UK Limited, trading as Taylor & Francis Group. Recent research on productivity finds that best management practices are a crucial but neglected element in explaining firm productivity. This stream of research also focuses on why a large number of firms may not implement best management practices despite their apparent benefits. In this paper, we examine the adoption of best management practices in small leveraged buyout (LBO) firms. Our choice of small LBO is motivated by the fact that these firms undergo extensive restructuring and, therefore, there is an opportunity to study the adoption process of best management practices. The findings show that buyout companies introduce best management practices (operations, monitoring, targets and incentive-related practices) at different stages of their development, and more importantly, these practices evolve in response to changes in various firm-level characteristics. For example, companies emphasizing cost leadership tend to follow targets and monitoring related practices while firms following a differentiation strategy are more likely to implement incentives and operations related management practices. Buyout sponsors’ board representatives and new CEO also play a critical role in the adoption of these best management practices which are linked to superior firm performance, measured as growth in revenues, productivity and return on assets.

Citation

Nisar, T. M., Kumar, N., & Prabhakar, G. (2019). Effect of best management practices on the performance and productivity of small firms. Production Planning and Control, 30(10-12), 919-934. https://doi.org/10.1080/09537287.2019.1582100

Journal Article Type Article
Acceptance Date Feb 7, 2018
Online Publication Date Jun 30, 2019
Publication Date Sep 10, 2019
Deposit Date Feb 19, 2018
Publicly Available Date Mar 28, 2024
Journal Production Planning and Control
Print ISSN 0953-7287
Electronic ISSN 1366-5871
Publisher Taylor & Francis
Peer Reviewed Peer Reviewed
Volume 30
Issue 10-12
Pages 919-934
DOI https://doi.org/10.1080/09537287.2019.1582100
Keywords best management practices, small firms, buyouts, firm performance
Public URL https://uwe-repository.worktribe.com/output/875395
Publisher URL https://doi.org/10.1080/09537287.2019.1582100

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