Grounding Dynamic Capability
Peter R. Dickson, Professor of Marketing
College of Business Administration
Florida International University
11200 SW 8th Street – UP RB308
Miami, Florida 33199
T 305.348.2571 – F 305.348.3792
dicksonp@fiu.edu
Paul W. Miniard, Professor of Marketing
College of Business Administration
Florida International University
11200 SW 8th Street – UP RB308
Miami, Florida 33199
T 305.348.2571 – F 305.348.3792
miniardp@fiu.edu
Alan J. Malter
Associate Professor of Marketing
Liautaud Graduate School of Business
University of Illinois at Chicago
2221 University Hall, 601 S. Morgan St., M/C 243
Chicago, IL 60607-7123
T 312-413-4142 – F 312-996-3559
amalter@uic.edu
Walfried M. Lassar, Associate Professor of Marketing
College of Business Administration
Florida International University
11200 SW 8th Street – UP RB308
Miami, Florida 33199
T 305.348.2571 – F 305.348.3792
lassarw@fiu.edu
April 2011
Grounding Dynamic Capability
Abstract
We explore the micro-foundations of organizational dynamic capability by considering what it requires of
the individual manager. Drawing from cognitive and social psychology, we propose that process thinking
skill and political skill ground dynamic capability in evolutionary economics and economic psychology
theory. As anticipated, both process thinking skill and political skill proved to be important predictors of
managers’ success in improving business processes across two heterogeneous samples. We further
identify three antecedents of process thinking skill: process learning skill, process implementation skill,
and need for cognition. We conclude our paper with a discussion of how future research might proceed in
building upon this initial exploration into the managerial skills that drive an organization’s dynamic
capability.
1
“Simon (1991) argues that strictly speaking organizational learning is only a metaphor
because all learning takes place inside human heads.” Dosi and Marengo (2007, p. 495)
In a recent Organization Science article, Augier and Teece (2009) describe the role of managers
in shaping organization capability and competitive advantage through processes that reconfigure and
redeploy resources to seize sensed opportunities. In this paper, we ask and seek to answer the next
question: what skills must managers possess to facilitate their role in their organizations’ efforts to
improve its processes, procedures and routines? Rothaermel and Hess (2007) empirically illustrate that
the locus of dynamic capabilities lies primarily at the level of the individual, thereby supporting others
recent calls for strategic management research to develop such a micro-foundation (Felin and Foss 2005;
Felin and Hesterly 2007; Walsh 1995).
The dynamic capability framework concludes that competitive advantage stems from superior
organization routines shaped by processes and by positions that themselves largely originate from past
processes and their path dependencies. The cumulative design of these routines and processes within the
organization over time and the skill required to replicate these processes in other geographical and
product markets make them hard to imitate “absent the hiring away of key individuals” (Teece, Pisano
and Shuen 1997, p. 526). This reality provides a vital clue to the future direction and development of the
theory of dynamic capability. It is explicit acknowledgment that a major driver of dynamic capability is
the process thinking skills of managers. Teece et al. (1997) further reinforce this conclusion:
“Considerable empirical evidence supports the notion that the understanding of processes, both in
production and in management, is the key to process improvement. In short, an organization cannot
improve that which it does not understand. Deep process understanding is often required to accomplish
codification” (p. 525). 1 (emphasis added)
The presence of process thinking skill throughout the layers of an organization’s processes
embeds dynamic capability in an organization, enabling the implementation of senior management’s
dynamic capability. Salvato (2009) empirically demonstrated the importance of “mindful activities” at all
1
Teece et al. do not cite the literature they are referring to but we assume it is the quality improvement literature.
2
levels of the organization in creating dynamic capability. A concrete illustration of this proposition is
provided by the General Electric 1990 annual letter to shareholders:
“These are numbers that couldn’t be improved as significantly as they have been by the actions of
the top one hundred, or one thousand, or even five thousand people in a company our size. They
can only be moved by the contributions of tens of thousands of people who are coming to work
every day looking for a better way.” (emphasis added)
The recognition and fostering of such organization-wide skill also readily identifies stand-out
junior managers as candidates for promotion to ever greater resource/asset deployment responsibility
where they can more effectively exercise their dynamic capability skills. Thus, while dynamic capability
largely resides in senior management (because of the scale and scope of the resource allocation decisions
that they make to seize sensed opportunities), organization success requires “an intensely entrepreneurial
genre of management constantly honing the evolutionary and entrepreneurial fitness of the enterprise”
(Teece, 2009, p. 58). Although this honing (creation, adaptation, polishing and winnowing) of processes
is required at all levels of management, if such skill is selected upon by human resource deployment
processes (e.g., recruiting and promotion processes), it will become concentrated at senior levels of
management.
So why, as stated by Teece (2009, p. 57), is superior operational efficiency and process
improvement throughout (across and down) the administrative function of the organization not a dynamic
capability? Such process improvement that improves operational efficiency inevitably involves some
reconfiguration and redeployment of resources, be they people assets, technology or other assets
employed in processes. And how can an organization otherwise stay agile in its pursuit of sensed
opportunities? Can it be agile at the top and rigid at lower levels of operational management? Moreover,
while particular instances of operational process improvement at lower levels of management may be
imitable and cannot confer a sustainable competitive advantage, the holistic system of continuous
operational process improvement (GE’s “looking for a better way”) that evolves through unique
organization cumulative design, emphatically can confer a distinct and sustainable competitive advantage
3
(e.g., Southwest Airlines). It is an important element of the following unique sustainable competitive
advantage succinctly described by Teece (2009):
“Sustainable competitive advantage can only flow from whatever unique ability business
enterprises have to continuously shape, reshape, configure and reconfigure, and align those assets
to create new technology, to respond to competition, gain critical mass, and serve changing
customer needs” (p. 156).
Our point is that interpretation of dynamic capability theory may be unreasonably constrained and the
scope of the theory too modest. Dynamic capability is an organization-wide capability made manifest by
the process thinking skills of its managers. We also agree with the empirical conclusion of Pavlou and El
Sawy (2011) that dynamic capabilities are valuable at all levels of environmental turbulence and that
managers must try to improve all operational processes regardless of the amount of environmental
turbulence.
In the following section of the paper, we ground dynamic capability in an evolutionary theory of
market selection on the process selection skills of managers and connect it to Penrose’s administrative
framework (Penrose 2009). We then present several hypotheses about what drives individual success in
improving organization processes. These hypotheses constitute a rudimentary economic psychology of
dynamic capability. This is followed by an assessment of these hypotheses using two separate samples of
managers. The paper concludes with a discussion that raises new questions and ways of advancing the
dynamic capability framework, the micro-foundations of organizational science and post-modern
microeconomics.
Dynamic Capability, the Penrose Administrative Framework and Process Hierarchy
According to Penrose (2009), “a firm is essentially a pool of resources the utilization of which is
organized in an administrative framework” (p. 132). Because it is a firm’s processes that use resources,
the Penrosian administrative framework is an organization of processes. This is consistent with Teece’s
(2009) conclusion that market conduct is driven by “standard operating procedures, investment routines
and improvement routines” (p. 258). The set of these processes. that configure the resources within the
administrative framework of processes by configuring and reconfiguring the processes is dynamic
4
capability. Eisenhardt and Martin (2000) particularly focus on product and business collaboration
(partnership) processes. Nonetheless, by definition, dynamic capability is manifested whenever a process
that uses resources is improved (i.e., the process produces more added-value output, increases its addedvalue output to input, or increases the speed and efficiency of its flow).
We now consider the configuration of the organization/framework of processes in further detail.
Learning processes guide the evolution of strategic (product development and partnering processes) and
operational processes. This is an extension of the theory that supply process superiority depends on a
supplier’s imitation and innovation learning processes that direct the improvement of the supplier’s
added-value operational routines (March and Simon 1958; Nelson and Winter 1982; Argote 1999).
Nelson and Winter (1982) assumed a simple configuration where routines are nested within search or
learning processes that determine the replication, adaptation or replacement of routines. Dickson (2003)
extended this process administrative framework into a nested hierarchy of learning – resource deployment
– system-control – and operational processes whose holistic configuration determines competitive
advantage and evolutionary success (see Figure 1). This hierarchy of processes and routines that generates
and modifies operational routines has been identified by several scholars as the fundamental
organizational dynamic capabilities mechanism (Lewin, Massini and Peeters 2011; Zollo and Winter
2002).
--- Insert Figure 1 about here --System-control processes such as accounting processes, input cost control processes, waste
control and recycling processes, quality measurement processes and customer satisfaction processes
monitor the performance of fundamental added-value operational processes all along the supply-chain and
particularly within each economic organization. This supply-chain consists of operational processes
generally occurring in the following horizontal sequence within each economic organization entity:
procurement processes, in-bound logistic delivery processes, manufacturing and customer service
delivery processes, marketing and sales customer contact processes, out-bound logistic delivery processes
and customer after-sales service processes including billing and purchase financing processes. The
5
success of redeploying resources along the organization’s added-value operational processes is neither
measureable nor consequently manageable without superior system-control processes. Hence, skill in
designing and implementing such operational system-control processes is a vital dynamic capability
affected by the system-control process improvement skills of management at all levels.
At the next level of organization processes in Figure 1, the improvement of its operational and
system-control processes depends on the resource deployment processes of the organization. This level
includes the organization’s business model development processes, new product and service development
processes, strategic and tactical partnering processes, and processes that develop and protect its human
and intellectual capital. Such processes are led primarily, if not entirely, by senior management. Note that
an organization’s dynamic capability is most often associated with this level of the organizational process
hierarchy. Even so, this capability is dependent on the entire process hierarchy within the organization.
Finally, these resource deployment processes are themselves molded by tacit and codified
learning processes (see Figure 1). These latter processes include the TQM or six-sigma process
improvement processes, bench-marking and best practice processes2 and incentive/reinforcement
processes that encourage experimental, replicate and imitative learning throughout all management levels
and the processes that they manage (i.e., throughout the entirety of the organization’s administrative
framework of processes).
Dynamic Capability Meets Economic Psychology
So what drives the learning processes and the evolution of the lower-level processes in Figure 1?
What is the (economic) psychology behind managerial dynamic capability skill? Although they may be
adapted and improved by chance, the processes in Figure 1 are primarily improved by managers using
their learning-by-doing, in-situ, experience combined with their process thinking aptitude and creativity.
This mindful process thinking skill is used to adapt and improve the processes they manage be they
learning processes, strategic resource deployment processes (e.g., product development processes,
2
“We may even need to check our reflex to assail those who celebrate best practices.” (Walsh, Meyer and
Schoonhoven 2006, p. 667)
6
business partnering processes and budgeting processes), system-control processes that track the inputs,
added-value outputs and speed of operational added-value processes, or the shop-floor manufacturing,
distribution, selling, procurement, delivery and customer service processes of the firm.
Long-term competitive advantage lies in the legacy and contemporary process thinking skills of
managers that leads to superior creation, adaption, replication and improvement of firm processes that
create new resource configurations that make markets (that fit, create and consummate an opportunity).
The resulting competitive advantage from the current resource configuration may be temporary, but the
process thinking skill that created the configuration of resource consuming processes is not. It continues
to reconfigure resources. It is sustainable, hard to imitate and uniquely suited to the enterprise, unless the
superior process thinkers move on or lose their motivation.
Can dynamic capability confer a sustainable competitive advantage in highly volatile, fermenting
markets? Yes, because even in highly unpredictable markets where fortuitously being in the right place at
the right time is paramount, chance favors the prepared mind (Louis Pasteur, lecture given at University
of Lille, 7 December 1854). In such markets, managers who possess superior process thinking minds will
produce superior improvisation of resource configuration processes. Productive knowledge, although
embodied in the organization processes, is the outcome of the process thinking of key designers,
implementers and managers of processes. Competences and capability rest fundamentally not within
processes, but within the process thinking of the designers and managers of the processes. What makes a
process manager something more than an administrator of a routine is her/his ability to understand, create
and improve the configuration of processes needed to redeploy resources to their competitive advantage.
The evolution of process superiority is achieved through the evolutionary principle of design
accretion - the cumulative design and improvement of processes as new process improvements are built
upon previous process improvements. A firm’s capabilities are shaped at its early stages by its initial
successful processes and it is the cumulative history of process thinking that drives a firm’s key resource
deployment processes and the derivative resources and assets that are created by their execution over time
7
(Dickson 2003). Dynamic capability creation requires non-linear thinking about a holistic, coherent set of
processes more or less configured (horizontally and vertically) in a coherent nested administrative
framework of processes (Dickson et al. 2009).
To summarize, the theory is that an organization’s imitation and innovation learning processes
depend on the process improvement thinking skills of individual managers, past and present (Dickson
2003). Such thinking cumulatively determines the holistic configuration of an organization’s learning
processes, resource deployment processes, system-control processes and added-value operational
processes. Thus, variance in process thinking skill drives economic selection and market competition
(Veblen 1898/1961; Winter 1990). An economy is an evolutionary system where selection is market
selection of the process selection skills of managers (Dickson 2003).3
Practically, such a perspective helps explain why highly orchestrated process improvement efforts
such as TQM or organization reengineering often fail to achieve their goals or are abandoned
(Wheelwright and Clark 1995; Pfeffer and Sutton 2000; Rigby and Ledingham 2004; Gosselin 2007;
Dickson et al. 2009). The efforts are designed and/or implemented by inferior process thinkers. For
example, in two case studies of orchestrated process improvements efforts, Repenning and Sterman
(2002) identified a first type of superior business process thinking that created positive process
improvement dynamics and a second type of inferior business process thinking that created perverse
negative process improvement dynamics. The practical mistakes made by senior management and their
consultants in implementing organization change are often several-fold, entwined in the organization’s set
of configured processes and, hence, difficult to diagnose and remedy.
First, they fail to recognize in their thinking and actions that processes are embedded in other
processes and that if an organization and its competitive advantage is a complex configuration of evolving
processes then changing one process is likely to require complementary changes in other processes up and
down and across the organization. The holistic nature of process organization and competitive advantage
3
Teece (2009, p. 244) comes close to articulating the selection on selection theory (Dickson 2003) in describing
managers as the proximate agent of selection when they redeploy resources, but what is immediately selected on is
the configuration of organization processes , not the economic unit.
8
that makes it so difficult for rivals to imitate also makes it difficult for management to change. Second,
senior management fail to recognize that the replicability of a newly configured set of organization
processes depends on lower level managers implementing it having the requisite skills to change their
thinking and sustain such changed thinking in the face of unexpected executed problems or unintended
process improvement dynamics. Dynamic capability must be infused throughout an organization’s
management and this requires process thinking and rethinking skill throughout an organization to
implement the organization leadership’s process innovations. This lower management implementation
skill will also inevitably produce bottom-up process innovation that if dismissed or frustrated by a
command-and-control senior management will create serious mixed signals and justifiable doubts as to
the quality of the process thinking and political skills of senior management. Finally, senior management
must possess the process thinking skills to understand that to diffuse or replicate a new process such as
TQM across an organization requires understanding the motivational and learning processes and their
dynamics needed to do so (Repenning 2002).
Teece (2009, p. 59) speculates that dynamic capability has a right-brain component, but does not
further probe or develop the psychology of dynamic capability. He is not alone. All of the business
disciplines (strategy, operations, logistics, marketing, human resource management, information
technology, accounting and finance) emphasize disciplinary and inter-disciplinary skill in thinking about
best practices (i.e., best processes) and the need for procedural rationality (Simon 1976). Across these
diverse business sub-disciplines, a central and universal theoretical construct is superior process thinking.
Even so, our literature searches have not, as of yet, revealed any empirical study of the psychology of
managers’ business process improvement skill and dynamic capability. In this paper, we undertake such
an exploration.
.
RESEARCH HYPOTHESES
We define a business process as a set of business tasks, activities, methods, practices and
techniques involving the combination of material inputs, technology and human labor to produce a
9
desired output: “The difference between task and process is the difference between part and whole”
(Hammer 1996, p. 5). This distinction is also relative, as a process becomes a task at a more aggregated
level of analysis. For example, a generic, quality-improvement process might involve the following five
tasks: define the target process → measure process performance → analyze the results → improve the
process → control the new process. Yet each of these “tasks” is itself a process involving a set of
activities required for its execution.
Following Levinthal and Rerup (2006), we do not make the sharp distinction drawn by others
(e.g., Nelson and Winter 1982) between a process and a routine (a mindlessly or customary executed
process). All organization processes involve a great deal of variance in thinking about the process during
its execution (as well as variance in ex ante and ex post thinking). A new manager may execute so-called
routines mindfully; the same for managers challenged to improve performance (Victor, Boynton and
Stephens-Jahng 2000). On the other hand, highly skilled mindful processes are sometimes dangerously
routinized and inattentively implemented. Undertaking a process mindfully even in the most vital
situations such as in conducting a surgical process (where a life is at risk) or flying a plane (where
hundreds of lives may be at risk) can be challenging, thus explaining the ubiquitous check-list as a way of
reducing thousands of hospital mistakes and increasing the safety of flying. Such process activities are a
practical recognition of what Levinthal and Rerup (2006) explicitly acknowledge as individuals’ “finite
capacity” for mindful process thinking and, at the same time, implicitly recognizes the variance in this
capacity across individuals (aptitude/endowment) and their situations (short-term context).
Process thinking skill is required to define and map the target process. What are its tasks and how
should they be sequenced? What are the subtasks within the tasks and their sequencing? What inputs are
involved and what technology is employed? Process thinking underlies the creation of system-control
processes that measure the determinant inputs, intermediate and final outcomes of the defined process and
its tasks and subtasks. Process thinking needs to choose useful analysis processes, draw performance
conclusions and “come up with” improvements in the target process. Finally, process thinking is behind
10
the creation of new system-control processes and reward system processes that control the new and
improved target process.
Accompanying such abstract process thinking is very concrete thinking about the various tools,
technologies, specific people, materials and other inputs that will be employed in completing a process or
project in a unique organization setting, be it a building contractor constructing a building, an
entrepreneur commercializing an innovation or a manager undertaking process improvement of any
business process. The ultimate goals of this business process thinking are, in theory and practice,
competitively superior operational processes, products, customer services, distribution, and trading
practices that redeploy and reconfigure resources in ways that create greater economic rents and capital
(Walton 1986; Stinchcombe 1990; Cohen 1991; Juran 1992; Creech 1994; Hammer 1996; Pyzdek 2003).
Managers must apply their process thinking skills to exploit: to imitate, codify, bed-down,
diffuse, refine, perform and conform existing best practice (March 1991; Gupta, Smith and Shalley 2006).
They must then punctuate this thinking with “creative destruction” exploratory thinking that leads to
process experimentation and innovation that is then itself codified, bedded-down, diffused, refined,
performed and conformed: i.e., exploited. Consider the surgical team leader who recognizes that extreme
repetition of a surgical process reduces fatal errors, but who is also aware of a constant stream of new
tools and procedures employing new nano-technology that greatly simplify, shorten, lower the cost and
increase the long-term efficacy of the operation. Knowing how to introduce the new technology in a way
that increases performance, but does not undermine high quality process conformance, requires superior
process thinking.
Just as people differ in their propensity to think (e.g., Cacioppo and Petty 1982; Cacioppo et al.
1996), people differ in their ability to think specifically about processes. This variance in cognitive
aptitude comes from the inevitable variance in nature (genetics), nurture (learning), and their
combination. Without training or experience confronting business process problems, a latent innate
process thinking aptitude may never manifest itself. A lack of interest in thinking, as measured by the
need for cognition scale (Cacioppo and Petty 1982), will also suppress the development of a process
11
thinking aptitude. Conversely, the absence of an innate process thinking aptitude or intelligence may
mean that no amount of business experience and learning of routines can compensate for a skill deficit in
thinking about how to combine past-learned processes and routines in novel ways.
A specific business process thinking skill is a combination of business process thinking aptitude,
training and specific experience. The general business process thinking aptitude that we conceptualize
should not be confused with mastery of a very specific business routine or company standard operating
procedure. Knowing how to do something, however well, or understanding a particular technology, is not
the same as a general process thinking aptitude. For example, when Toyota employees evaluate weekly
how to improve their jobs and workflow processes (Adler and Clark 1991) some will be much better at
process improvement than others with the same work experience. Some will get better at the weekly
process improvement process, but some may never get better even though they are good production
workers, either because of a lack of motivation or a lack of aptitude (Victor, Boynton and Stephens-Jahng
2000). Furthermore, engineers trained to design specialized technology processes may still lack the
ability to design or improve more general business processes that involve a social dimension such as
hiring processes
Managers who are superior business process thinkers are masters at identifying the limitations of
their company's existing processes/practices and improving their efficiency and/or effectiveness (Hammer
2007). However, the cognitive abilities of these managers may not bear fruit unless they are also
successful at getting their ideas accepted, supported, and implemented. For example, in the product
innovation literature, scholars have concluded that product managers and exceptional innovators need to
be not only skilled in thinking about various processes, but must also be well connected, politically savvy
and possess interpersonal skills (Griffin et al. 2009; Tyagi and Sawhney 2010). Changing existing
business processes requires more than “seeing” how they can be improved. It also requires changing
comfortable or mindlessly executed routines and managing challenges from others within the business
that have a vested interest in keeping things the way they are or who wish to initiate and get credit for
their alternative proposed process improvements. For these reasons, a manager's political skill, defined by
12
Ferris et al. (2005) as the ability to understand work colleagues and use this understanding to network and
change others’ behavior for personal and/or operational objectives, will also be an important determinant
of a manager's process improvement performance. When managers with superior process improvement
thinking possess minimal political skill, they are less likely to be successful at implementing their
thinking or at getting credit for it. This argument is similar to that of Verbeke et al. (2008) that
intelligence interacting with social competence determines salesperson performance.
Thus, the managers most successful at business process improvement possess both superior
process thinking and political skills. However, as process improvements are often team efforts, the lack of
process thinking or political skills of one team member may be compensated for and complemented by
the skills of another team member.4 As such, the effect of an individual’s process thinking and political
skill on her or his success at process improvement need not be multiplicative (conditional on the presence
of the other within the individual) and, instead, can be additive. More formally, we hypothesize:
H1: Business process thinking skill and political skill both additively and interactively
increase an individual’s business process improvement skill.
What determines business process thinking skill? We study two potential determinants suggested
by Malter’s (2000) research: personal process learning skill and personal process implementation skill.5
The former is one’s skill at quickly learning and remembering how to “do things”: i.e., superior
procedural memory (Cohen 1991). We theorize that an important determinant of superior business
process thinking is the capacity to remember, store and access processes, sub-processes, tasks and subtasks from long-term memory in order to analyze and synthesize them in working memory. This requires
superior procedural or script memory (Schank and Abelson 1977). While there may be exceptions, in
general, someone with an inferior procedural memory who is not good at personally learning new ways of
“doing things” is less likely to be a superior process thinker.
4
We acknowledge that future studies might focus on collective team process thinking and its dynamics. We do not.
Malter (2000) developed a process learning scale that combined elements of process learning and process
implementation. Malter found moderate correlations ranging from .22 to .33 between process learning and need for
cognition (Cacioppo and Petty 1982), intrinsic motivation (Amabile et al. 1994), and an innovation aptitude measure
developed by a major consumer packaged goods firm to select managerial candidates.
5
13
Again, while there may be exceptions (e.g., the big picture thinker), we further propose that those
who are not skilled at thinking about and managing the implementation of their own workflow are less
likely to be good at thinking about implementing broader business workflows (processes): the “first
manage thyself” maxim. Prospective memory is memory for future events, including what to do next (as
opposed to retrospective memory – memory for past events). Prospective memory ability varies between
individuals (Krishnan and Shapiro 1999; Meacham and Leiman 1982). A weak prospective memory will
limit the ability of managers to think about what has to be done next, rearrange individual task and
activity priorities on the fly, action plan, multi-task and manage their own time and workflow.
Genetic selection in social species that rely on collective survival processes will presumably favor
superior procedural and prospective memory. This is because individuals with such memory skills will be
able to learn and execute new individual and group survival processes very quickly. We thus theorize that
process thinking skill depends on personal process learning and implementation skills. They combine
additively and multiplicatively (one empowers the other) in determining process thinking skill. This leads
to H2:
H2: Personal process learning skill and process implementation skill additively and interactively
increase business process thinking skill.
We further theorize that there is a third antecedent, an intrinsic motivation component to process
thinking aptitude. Managers with a high general need, intrinsic desire, motivation, and drive to “think”
will be better general process thinkers because they are intrinsically motivated to undertake such thinking
about all processes and, consequently, will devote more time and cognitive resources to process thinking.
The Need for Cognition scale (Cacioppo and Petty 1982; Cacioppo, Petty and Kao 1984; Cacioppo et al.
1996) measures individual differences in motivation to think and has proven useful in numerous
investigations. (Cacioppo et al. 1996). Applying it to managerial thinking processes, we propose:
H3: Need for cognition increases business process thinking skill.
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STUDY 1
Method
The participants were members of a national online panel who fit the screening criteria of being
managers in the private sector between the ages of 30-50. We constrained the age range to at least 30 so
that most respondents would have a reasonable number of years of work to build a track-record for
process improvement and to under 50 to reduce the number of managers in the sample who might be
coasting toward retirement. Five hundred and ninety individuals meeting these criteria responded
completely to an online survey.6 Table 1 presents the survey demographic characteristics.
In order to gauge a manager's effectiveness at improving business processes, we asked
respondents to reflect back on their work careers and recall the frequency that they had been recognized
for their success at process improvement. This measure, reported in the Appendix along with the
remaining measures of interest here, consisted of 12 different items representing various ways in which
someone could manifest her or his process improvement effectiveness (e.g., "you have been recognized
for improving the design of business processes"). Respondents reported the frequency of these
manifestations on a five-point scale ranging from "never" to "very frequently," with greater frequency
interpreted as indicating greater effectiveness at process improvement.
This measure of reported frequency of recognition over a work career that has often involved
management of different processes in different jobs and different businesses and/or management of more
aggregated processes (with promotion to senior management) is less likely to be context specific and,
thus, more consistent with our general aptitude measures. In our item analyses, two items dealing with
process patents (“You have applied for a method, system, technique or process patent” and “You have
been granted a method, system, technique or process patent.”) were dropped because of their low
correlation with the other items (less than .4, Nunally 1978).
6
Please visit zoomerang.com for further information on the panel and survey research methodology. The sampling
quota was reached within 48 hours rendering early/late response analysis as a surrogate for non-response analysis
pointless. Over 75% of the participants who started the survey completed it.
15
We acknowledge the likely presence of self-presentation, response set and common method
biases and address them in the following ways: (1) We focus on the distinctive patterns of covariance in
our data rather than the mean score or correlation size. The presence of common method and response set
biases reduce the variance in correlations between measures. Thus, when our discriminating tests of
relationships that we used in our hypothesis testing are supported (requiring variance in correlations
between measures), then our tests are more conservative.
Self-presentation bias would result in
respondents overstating their skills but would have more of an effect on conclusions drawn about mean
scores rather than about the covariance matrix; (2) We conducted a Harman one-factor test (Podsakoff
and Organ 1986) on our data; (3) We ran our analyses with and without the participants whose responses
to our scales appeared to follow a response set; (4) We conducted a discriminant validity test; and, (5) We
note that common method variance favors linear effects rather than the multiplicative (interactive) effects
that dominate our predictions and results.
We adopted the measures (see Appendix) used by Cacioppo, Petty and Kao (1984) for assessing
need for cognition (NC) and Ferris et al. (2005) for measuring political skill (PS). The measures for
assessing business process thinking skill (BPTS),
process learning skill (PLS), and process
implementation skill (PIS) draw on Malter (2000). An extensive and search of the business, engineering,
economics and psychology literatures as well as a Google search did not identify any other scales whose
items in whole or part we could use in assessing process-thinking skill. The closest were time
management self-audit scales and problem solving/creativity scales (see Malter 2000).
Our business process thinking scale items are not specific to particular work processes. Rather,
they focus on business processes in general. This is consistent with our goal of measuring this skill and its
determinants in a sample of managers who worked across all functions and processes in the added-value
chain; for companies small and large; in a wide variety of industrial and service sectors. The scales
assessing learning and implementation of personal processes/tasks are, by design, similarly general in
their specification. In addition, given that the political skill measures are calibrated at a general level,
16
assessing the process-oriented variables at the same level of calibration does not slant the playing field in
favor of one set of measures over another in predicting process improvement.
Results
Measurement Variances, Reliabilities and Correlations. Table 2 presents the means and standard
deviations for the measures. Table 3 shows the correlation matrix. The mean response to the process
improvement recognition (PIR) measure was 3.5/5.0, placing it midway between the “infrequent
recognition” and “frequent recognition” response categories.
The scale standard deviation was .9,
indicating plenty of variance to explain. The respective means (standard deviations) of business process
thinking skill and political skill were 3.9 (.7) and 3.8 (.7). Again, there was no evidence of ceiling or floor
effects and plenty of variance across the sample. Internally consistent measurements have alphas larger
than .8 (Norusis 2005, p. 436). Table 2 presents the alphas for each of the measures that range from .81
for process implementation skill (PIS) to .96 for the key dependent measure, process improvement
recognition (PIR).
A Harman one-factor analysis (Podsakoff and Organ 1986) of the 66 items measured in this study
produced nine components with eigen values greater than one. Varimax rotation produced a first
component that represented process improvement recognition (the PIR item weights ranged from .67 to
.86 and the next highest weight for any other scale item on this component was .37). This general factor
analysis as well as factor analysis of the individual scales also supported the single dimensionality of the
measures except for political skill.7 Its first three items measuring organization “connectedness” (see
Appendix) constituted a second factor, so we treated political skill as both a single and two dimensional
construct in subsequent analyses: Political networking skill, PNw (alpha = .83) and Political interpersonal
savvy, PSvy (alpha = .91). Because of the high alphas, we undertook all of our testing using raw scale
scores rather than factors (thus including item measurement error variance that our models could not
7
The scales with reversed measures exhibited a common problem of smaller loadings of the reversed items on the
principal component. Participants who exhibited set responses such as scoring “4”s and “5”s on scale items whether
reversed or not were identified and when these 86 participants were removed from the analysis the loadings of the
reversed items on the first factor increased. We ran all the analyses with and without these participants and while the
explained variance did change, the significance of the terms did not.
17
possibly explain) following the two dictums: (1) when given the choice, test more conservatively and (2)
don’t throw away information. We also tested our hypotheses using factor scores and our conclusions did
not change materially.
Measure Validation
A history of process improvement recognition should have a positive effect on the income that a
manager earns. We asked managers to compare their income to the median for someone with their years
of professional work experience (see Appendix for a description of the measure). Interestingly, the mean
response was only 80% of the median income of their peers. We take this opportunity to point out that if a
self-presentation bias had a powerful influence on participants' responses, then we would have expected
much more favorable responses to this measure than was observed. We then tested the relationship
between PIR and income. and, if so, did it fully mediate the effect of business process thinking skill and
political skill on relative income? PIR explained eight percent of the variance in the relative income
measure (adjusted R2 =.08, p<.05). and when PIR was added to a model containing business process
thinking skill x political skill, this latter interaction term ceased to be significant.
Another indicator of process improvement recognition’s nomological validity is whether it relates
to other measures capturing recognition of team leadership. We asked the following three questions and
summed them into a team-leadership success scale (alpha = 0.96):
“You have been a leader of a team recognized for its above average initiative and enterprise”
“You have been a leader of a team recognized for its problem solving skills”
“You have been a leader of a team recognized for its implementation/operational skills”
1. Never, 2. Very infrequently, 3. Infrequently, 4. Frequently, 5. Very frequently.
The correlation between team leadership success recognition and individual process improvement
recognition was .76 (p<.05).
Presumably, the best process thinkers hold different opinions about various aspects pertaining to
process improvement methods than do their less skilled counterparts. Accordingly, we assessed such
opinions and compared those managers reporting the highest level of process thinking with the rest of the
sample. As reported in Table 4, a number of significant (p<.05) differences emerged indicating managers
18
who reported very high business process thinking skills possess a deeper understanding of process
improvement methods and when they are effective. For example, better process thinkers agreed more
strongly that the methods required sufficient training, a culture of change, the right incentives and senior
managers who possess process- thinking skills.
Hypothesis Testing. To test H1, we first treated political skill (PS) as a single construct and fitted
a main effects model followed by testing a model including both main effects and their interaction. The
results using normalized betas were:
PIR =
.28BPTS + .42PS ………………………......................................................adj.R2=.40….(1)
(t=6.7)
(t=10.3)
PIR = -.06BPTS + .08PS + .62(BPTS*PS) …………………………….................adj.R2=.41….(2)
(t=-0.4)
(t=0.5)
(t=2.3)
In support of H1, both business process thinking skill (BPTS) and political skill (PS) are significant
(p<.05) in the main effects model. However, when the multiplicative term is added, it is the only
significant term (p<.05).8
To explore the separate effects of both components of political skill, political networking skill
(PNw) and political interpersonal savvy (PSvy), we included the two interaction terms (BPTS*PNw,
BPTS*PSvy) in a model. Both were significant, but the standardized beta of the interaction between
business process thinking skill and political networking skill (beta=.52, t=10.7) was close to three time
larger than the standardized beta of the interaction between business process thinking skill and political
interpersonal savvy (beta=0.18, t=3.7). The explained variance increased from 41% to 45%.
According to H2, business process thinking skill depends on both process learning (PLS) and
process implementation (PIS) skills. We tested this hypothesis by first testing the main effects model and
then the model adding the interaction term:
8
When BPTS and PS are standardized and normalized both main effects and the interaction term are all significant
(p<.05). This again supports H1 that both superior business process thinking and political skills together increase
business process improvement. Conceptually, however, standardizing the terms in the interaction creates a problem
as below average (negative) scores on each effect create a positive interaction score. We do not predict that inferior
business process thinkers who are also low on political skill are more effective process improvers.
19
BPTS = .44PLS +
(t=12.4)
.42PIS ……………………………………………….............adj.R2=.65….(3)
(t=11.8)
BPTS = .10PLS + .00PIS +
(t=1.0)
.72(PLS*PIS)……………………………….........adj.R2=.66….(4)
(t=0.0)
(t=3.6)
Only the product of process learning skill and process implementation skill explains business process
thinking in the full model. However, in terms of explanatory power, the choice between the additive and
multiplicative models is equivocal. Both support H2.
To test H3, about the influence of need for cognition (NC), we fitted the following model:
BPTS = .01PLS - .11PIS + .30NC + .95(PLS*PIS) - .21(PLS*PIS*NC)………….adj.R2=.69….(5)
(t=0.1)
(t=-0.8)
(t=3.0)
(t=2.8)
(t=-0.9)
Consistent with H3, NC had a significant (p<.05) main effect on BPTS and explained an additional three
percent of the variance in business process thinking skill. This result supports H3.
Finally, if BPTS and PS play a central role in increasing PIR, then they should mediate the effect
of PLS, PIS and NC on PIR. We tested for mediation by fitting the following models of process
improvement recognition (PIR):
PIR =
.19PLS + .12PIS + .23NC………………………………………………..adj.R2=.20….(6)
(t=3.5)
PIR =
-.11PLS
(t=-2.2)
PIR =
(t=2.1)
(t=5.3)
- .11PIS + .09NC + .75(BPTS*PS) …………………...............adj.R2=.42….(7)
(t=-2.3)
(t=2.4)
(t=15.1)
.06NC + .61(BPTS*PS) ……………………...........adj.R2=.41….(8)
(t=1.5)
(t=16.3)
When the BPTS*PS interaction term was added and the PLS and PIS suppressor effects (as evidenced by
the reversal in their beta signs between equations 6 and 7) were dropped, only the interaction term
remained significant (see equation 8). In further analysis, the process learning by process implementation
skill interaction (PLS*PIS) effect on process improvement recognition (PIR) was fully mediated by the
business process thinking x political skill interaction (BPTS*PS) as it did not have an incremental direct
effect on PIR. These results also demonstrate the discriminating influence of BPTS*PS in predicting PIR.
20
STUDY 2
Method
Study 2 used the same methodology and sample provider as the prior study. We did modify,
however, our sampling criteria by extending the top of the age range from 50 to 60 and excluding anyone
that did not designate the functional area in which they worked. Five hundred and seventy four managers
completed the survey, with 332 describing themselves as CEOs, Presidents, Owners, Partners or General
Managers and another 126 describing themselves as Vice-Presidents or Assistant Vice-Presidents. Thus,
Study 2 allowed us to test our research hypotheses using a sample of much older and more senior
executives. Table 1 provides additional demographic details about these survey respondents.
The same measures as Study 1 were employed with the following addition. In this study, we
undertook a desirable test of nomological validity: that business process thinking skill would have no
influence on managers’ recognition in a behavioral domain outside of process improvement, while our
other major construct, political skill, would continue to be influential. We chose managers’ recognized
success in dealing with personnel and organization politics as such a domain. We then developed and
assessed a counterpart to the process improvement recognition (PIR) measure in the domain of political
and personnel recognition (PPR) (see Appendix).
Results
Measurement Reliabilities and Correlations. The internal consistency of our measurements was
again quite acceptable: PPR (alpha=.95), PIR (alpha=.95), BPTS (alpha=.87), PS (alpha=.89), PNw
(alpha=.86), PSvy (alpha=.88), PLS (alpha=.80), PIS (alpha=.81), and NC (alpha=.87). The correlation
matrix for Study 2 appears in Table 3. The pattern of these correlations is very similar to that observed in
Study 1 except that the correlations between process improvement recognition (PIR) and the other
measures were lower in this study than in the prior one. We believe this difference is due to a change in
the measurement order. In Study 1, all of the measures were contiguous. In Study 2, process improvement
recognition (PIR) and political and personnel recognition (PPR) were separated deliberately from their
predicted antecedent measures by 51 other questions. This separation eliminated the strengthening of
21
observed relationships due to contiguous measurement (Rindfleisch et al. 2008). Nonetheless, it should
again be noted that the pattern of high (> .75) and low correlations (< .3) in Study 1 was replicated in
Study 2.
Response biases, despite their unavoidable presence, have not swamped the distinctive
covariance structure observed in both studies.
Hypothesis Testing. To assess H1's prediction about the influence of business process thinking
skill (BPTS) and political skill (PS) on process improvement performance (PIR), we tested the main
effects and interaction added models that produced the following results:
PIR =
.17BPTS + .41PS ………………………………………………………….....adj.R2=.27.…(9)
(t=3.8)
(t=9.3)
PIR = -.17BPTS + .08PS + .60(BPTS*PS)………………………………………....adj.R2=.27….(10)
(t=0.9)
(t=0.4)
(t=1.8)
As in Study 1, both BPTS and PS are significant (p<.05) predictors of PIR, but not in the presence of their
interaction which is the only significant (p<.05) predictor in the full model. Again both the additive and
interaction model have the same explanatory power. Note that in our second study containing a higher
percentage of senior managers, political skill was even more dominant in explaining process improvement
recognition compared to business process thinking skill in the additive main effects model.
To test the separate effects of both components of political skill, political networking skill (PNw)
and political interpersonal savvy (PSvy), we again included the two interaction terms (BPTS*PNw,
BPTS*PSvy) in a model. Both were significant, but the standardized beta of the interaction between
business process thinking skill and political networking skill (beta=.44, t=8.7) was close to four times
larger than the standardized beta of the interaction between business process thinking skill and political
interpersonal savvy (beta=0.11, t=2.2). The adjusted explained variance in the model containing the two
interaction terms was 27%.
We anticipated that a manager's business process thinking skill would have no impact on political
and personnel recognition. In contrast, political skill should be an important determinant of this type of
recognition. We examined two models that included both business process thinking skill (BPTS) and
22
political skill (PS) as predictor's of political and personal recognition (PPR), but which differed in
whether they used a single (equation 11) or dual component (equation 12) representation of political skill.
These models generated the following results:
PPR =
-.02BPTS + .59PS ……………………………………................................adj.R2=.34….(11)
(t=-0.4)
PPR =
(t=14.3)
.00BPTS + .44PNw + .25PSvy…………………………..........................adj.R2=.36….(12)
(t=0.1)
(t=10.9)
(t=5.7)
As can be seen, business process thinking skill (BPTS) added nothing to explaining participants’ selfreported recognition at being successful in dealing with political and personnel issues. Further reducing
concern about a self-presentation explanation is that Ferris et al. (2005) tested and found no relationship
between their political skill scale and a social desirability response scale. We believe that our business
process thinking skill scale is no more likely than the political skill scale to be subject to a selfpresentation response bias. If we assume that our key dependent measure, process improvement
recognition, was susceptible to a self-report/self-presentation bias, but that the political skill and business
process thinking skill measures were not, then this makes our testing more conservative because it
increases the unexplained variance in the dependent measure without doing so in the independent
measures.
H2 predicts that business process thinking skill (BPTS) depends on both process learning (PLS)
and process implementation (PIS) skills. We fitted the following models and obtained these results:
BPTS =
.40PLS + .47PIS …….……………………………….….......................adj.R2=.61…..(13)
(t=11.8)
BPTS =
(t=13.9)
.18PLS + .23PIS +
(t=1.2)
(t=1.5)
.41(PLS*PIS) ..………..…….………...................adj.R2=.61….(14)
(t=1.5)
To address the lack of individual term significance in equation (14), a stepwise regression was
undertaken. The interaction term was significant (beta=0.78; t=29.7, p<.05) and was the only term to
enter the model. In terms of explanatory power, both the additive and multiplicative models again
23
explained the same amount of variance in business process thinking skill (BPTS). Consistent with Study
1, need for cognition had a significant (p<.05) main effect on BPTS and explained an additional three
percent of variance. Again, then, H3 was supported.
The following equations reveal that the effects of process learning skill (PLS), process
improvement skill (PIS) and need for cognition (NC) on process improvement recognition (PIR) were,
when the suppressor effects were removed, again fully mediated by the interaction of business process
thinking skill and political skill (BPTS*PS):
PIR =
.09PLS + .17PIS + .19NC…………………………….……….………..adj.R2=.12….(15)
(t=1.3)
PIR = -.13PLS
(t=3.3)
- .04PIS + .09NC + .58(BPTS*PS) ………………................adj.R2=.27….(16)
(t=-2.6)
PIR = .06NC +
(t=1.5)
(t=4.3)
(t=-0.8)
(t=2.1)
(t=10.7)
.48(BPTS*PS) ……………................................................................adj.R2=.26….(17)
(t=11.5)
In summary, the results of Study 2 (consisting mostly of managers with greater seniority)
replicated all of the significant findings of Study 1 (consisting of mostly younger managers). In addition,
Study 2 provided useful evidence of the business process thinking measure's discriminant validity.
DISCUSSION
In this paper, we identified and studied two primary psychological skills that drive organization dynamic
capability. Though individual process thinking skill is clearly important in all types of process
improvement, managers also need political skill to implement process improvement. In fact, our studies
found that political skill had a larger influence on process improvement recognition than did process
thinking skill. We identified three significant antecedents of process thinking skill: process learning skill,
process implementation skill and need for cognition; but other possible antecedents of political skill need
further investigation.
24
Limitations and Future Research
In our investigation, we undertook a form of concurrent measure testing and theory testing by
establishing that, after some minor refinement, our scales had adequate variance and internal consistency,
they passed several validity checks and tests, and our findings were consistent across two studies
involving a very different mix of senior management. Our approach is consistent with a philosophy of
science that theory testing is bounded by the measures used and measurement testing is bounded by the
theory used (Kuhn 1970). However, there is “mopping up” to be done (Kuhn 1970) on the measures and
plenty of opportunity to link refined measures of process thinking with an evolving micro-foundation
theory of dynamic capability that has largely been conceived of at the organization level. For example, is
the process thinking skill involved in ‘exploring’ innovative processes a complement to the process
thinking skill of ‘exploiting’ process innovation? Do superior process thinkers better understand the
dynamics of getting things done and diffusing practices and processes such as TQM throughout the
organization (Repenning 2000)? Generally are they also superior strategic dynamic thinkers (Dickson,
Farris and Verbeke 2001) and does this dual skill link micro organization and macro economic processes
– a linkage already recognized as a fruitful area for future research (Dosi and Marengo 2007, p. 499). Is
the effect of process thinking skill and political skill on process improvement multiplicative within
individuals, but additive within organization teams? Do particular management functions require higher
process thinking skill reflecting the more complex or abstract processes managers must design and
manage?
Political Skill Research Questions
We examined two main roles for political skill in predicting performance, as a primary main effect and as
a secondary moderator (Ferris et al. 2005, p. 148). Political skill was significant in both roles and it
addresses a substantial issue in dynamic capability.
When managers are hired away to imitate a
configuration of processes developed by their previous employer, the problem is that they lack a network
of trust and expertise in the new firm that they had developed in their old firm. This may greatly limit
their ability to improve the processes and dynamic capability of their new employer. Similarly,
25
consultants may be expert business process thinkers and understand the politics of implementing change,
but they themselves are limited in effecting process improvement because of their lack of a deeply
embedded network of trusted collaborators within the organization.
Whereas our investigation made some progress toward understanding the antecedents of
managers’ business process thinking skills, it is silent about the factors that determine their political skills.
This suggests a fertile ground for management scholars: the study of how skilled business politicians use
their connections, networking and interpersonal shrewdness to change the way things are done at work
(i.e., to implement process improvement that reconfigures resources). Questions remaining to be
answered include the degree to which political skill is determined by attribution skills, empathizing skills,
and the use of impression management and other social influence techniques.
A potentially provocative question is how much of political skill’s influence on process
improvement recognition is due to the use of this skill to manipulate others’ attributions of who deserves
credit for process improvement, particularly in teams (e.g., Paulus et al. 1993), rather than to implement
successful process improvement and contribute to the dynamic capability of the organization. A surfeit of
such self-serving political skill and a deficit of genuine business process thinking skill, particularly
amongst senior management, may help explain why companies often have problems implementing
orchestrated formal process improvement efforts as discussed in the introduction. Such leadership
problems may also presage even greater calamity down the road. If outdated, inferior process thinking is
not winnowed out by the initiative of managers to improve their process thinking, or by replacing inferior
process thinkers, then it will ultimately be winnowed out in the most catastrophic way, by the takeover or
failure of the business (Dickson 2003).
CONCLUSION
We have taken dynamic capability, a strategic management, organization-level construct and
made the case that it requires skill at all levels of management and the skills needed are business process
26
thinking skill and political skill. A combination of business process thinking skill and political skill
(particularly organization networking skill) was observed to be a significant determinant of a manager’s
history of process improvement recognition. Further multi-method research based on our findings may be
of particular interest to strategy scholars interested in developing the theory of dynamic capability,
applied consultants that specialize in organization process improvement (at all levels of process
management), enterprises that specialize in measuring management aptitude, and recruiters.
Governments and economic think-tanks that recognize that the increased productivity and
adaptability of an economy depends on the dynamic capabilities of its economic organizations, but are at
a loss to know what they can do about it, might consider the process improvement skills of their nation’s
managers (cf. the work or process execution skills of their nation’s labor force.) Our research findings
might also be applied to selection, retention and promotion in the public sector where improving the
resource deployment and bureaucratic processes in a rapidly changing operating environment is a
monumental challenge.
The successful practical deployment of the many and varied decision and implementation tools,
practices and resource deployment processes that populate the pages of our management journals
depends, in large part, on the business process thinking and improvement skills of the managers who
attempt to implement them. What we have observed is variance in these skills and some explanation of
this variance, but much remains unknown about the individual skills required to create organization
process improvement and dynamic capability.
27
Learning processes
Benchmarking, training, incentive processes
Resource deployment processes
HR, R&D, product development, budgeting , planning, partnering,
rent protecting processes
System control processes
Customer satisfaction, quality, waste and cost control processes
Primary added-value processes
-supply-manufacturing-selling-distribution-service- processes
Figure 1: Dynamic Capability as a Configured Administrative Framework of Processes. Above is a
cross-sectional view of an organization’s hierarchy of processes. The horizontal sequence of primary
added-value processes (procedural routines) of the firm have wrapped around them system-control
processes that themselves have wrapped around them resource deployment processes that all have
wrapped around them organization learning processes. This set of tacit and codified processes woven into
a complex, holistic configuration of processes is always dynamically evolving following the principles of
cumulative design and path dependency.
28
Table 1
Study 1: Respondents' Demographic Characteristics
Age
31-35
36-40
41-45
46-50
Total
Function
Customer relationship management
Operations/manufacturing
Creative design engineering
Other
Total
Female
105
78
75
37
295
Males
57
71
84
83
295
Total
162
149
159
120
590
Management Level
Senior Middle Lower
44
31
176
16
15
90
22
11
37
47
16
85
129
73
388
Total
251
121
70
148
590
Study 2: Respondents' Demographic Characteristics
Age
31-35
36-40
41-45
46-50
51-55
56-60
Total
Function
Customer relationship management
Operations/manufacturing
Creative design engineering
Computer and Information Technology
Other
Total
Female
37
41
41
67
69
51
306
Males
24
24
49
53
63
55
268
Total
61
65
90
120
132
106
574
Management Level
Senior Middle Lower
184
24
18
83
9
3
40
8
6
62
12
13
89
7
16
458
60
56
Total
226
95
54
87
112
574
29
Table 2
Study 1: Measure Characteristics
# Items
in scale
Mean
SD
Alpha
Process improvement performance (PIR)
12
3.5
0.9
0.96
Business process thinking skill (BPTS)
12
3.9
0.7
0.88
Political skill (PS)
10
3.8
0.7
0.90
Process learning skill (PLS)
6
4.1
0.7
0.82
Process implementation skill (PIS)
8
3.9
0.7
0.81
Need for Cognition (NC)
18
3.4
0.6
0.89
Table 3
Study 1: Correlation Matrix
BPTS
0.55
PIR
BPTS
PS
0.60
PNw
0.57
PSvy
0.51
PLS
0.39
PIS
0.37
NC
0.38
0.64
0.39
0.66
0.75
0.75
0.57
0.78
0.94
0.59
0.53
0.39
0.51
0.26
0.30
0.26
0.65
0.56
0.37
0.73
0.47
PS
PNw
PSvy
PLS
0.49
PIS
Study 2: Correlation Matrix
PIR
BPTS
PS
PNw
PSvy
PLS
PIS
NC
BPTS
0.40
PS
0.50
PNw
0.50
PSvy
0.40
PLS
0.26
PIS
0.30
NC
0.30
PPR
0.78
0.57
0.40
0.56
0.69
0.72
0.56
0.32
0.81
0.92
0.47
0.47
0.35
0.58
0.52
0.28
0.29
0.24
0.56
0.51
0.49
0.31
0.48
0.62
0.49
0.22
0.52
0.28
0.25
30
Table 4
Opinions About Management Improvement Methods
“Over the last 30 years numerous books and consultants have written about total quality management,
quality function deployment, process re-engineering, continuous improvement and six-sigma
management. Please indicate your agreement or disagreement with the following statements about these
management improvement methods: 1=Strongly disagree, 2=disagree, 3=neutral, neither disagree or
agree, 4=agree, 5= Strongly agree”
Business Process Thinking Skill Self-rating
Above 4.5/5 (n=138)
F1*
Their success depends on the quality of the training.
They depend on a business culture that embraces
business change.
Their success depends on employee reward systems
being aligned with their goals.
They all depend on the process thinking skills of
managers who have to implement them.
They are all different ways of improving firm processes.
They all depend on the process thinking skills of the
CEO and his/her consultants.
F2
They are way oversold.
They are just ways of selling a lot of books and consulting
They are just the latest flavor of the month fad.
They have greatly improved the competitiveness of
American business.
F3
These techniques only apply to manufacturing.
These techniques are not used in small to medium
sized companies.
They are too complicated and difficult to implement.
I really know very little about them.
Senior management buy into them but middle
management often does not.
They have completely changed the culture and thinking
of many companies.
They often fail because of the political power of
functional silos.
4.5 and below/5 (n=452)
4.01**
3.67
3.99**
3.56
3.67**
3.47
3.93**
3.91**
3.57
3.50
3.48**
3.23
3.16
3.12
2.93
3.33
3.22
3.02
3.50**
3.18
2.08**
2.54
2.36**
2.72
2.48**
2.66**
2.83
3.08
3.28
3.31
3.38
3.21
3.30
3.29
*A varimax rotation of a factor analysis of the managers’ agreement with the above statements
revealed three orthogonal factors (F1, F2 and F3). The items that loaded on each factor are
presented in the order of their loadings on the factor. The last five items did not have a loading
above 0.6 on any of the three factors.
** p < 0.05 (two tailed, equal variances not assumed).
31
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Appendix
Process Improvement Recognition (PIR)
How often have the following ever happened in your work career? By recognized we mean recognized by
colleagues, partners, senior management or those who report to you. Please use the following scale:
Never = 1, Very infrequently = 2, Infrequently = 3, Frequently = 4, Very Frequently = 5
1. Other managers have come to you for advice on how to solve operational problems.
2. You have been recognized for the improvements you have made in the processes/programs that you
have managed.
3. You have been recognized for your creative how-to-do-things thinking.
4. You have been recognized for improving the design of business processes.
5. You have been recognized for your above average initiative and enterprise.
6. You have been recognized for thinking of cost saving ideas.
7. You have been recognized for thinking of ways of adding customer value.
8. You have been recognized for thinking of quality improvements.
9. You have been recognized for ideas that have simplified work programs, standard operating
procedures, routines and processes.
10. You have been recognized for “best practice” improvements in operational procedures, practices,
programs or projects you have managed.
11. You have been recognized as a process design guru.
12. You have been recognized as a great process coach.
Political and Personnel Recognition (PPR)
How often have the following ever happened in your work career? By recognized we mean recognized by
colleagues, partners, senior management or those who report to you. Please use the following scale:
Never = 1, Very infrequently = 2, Infrequently = 3, Frequently = 4, Very Frequently = 5
1. Other managers have come to you for advice on how to solve political problems in
the business.
2. Other managers have come to you for advice on how to solve personnel problems.
3. You have been recognized for your creative business political thinking.
4. You have been recognized for your personnel handling skills.
5. You have been recognized for your ability to handle personnel problems.
6. You have been recognized as a great personal coach.
7. You have been recognized for your leadership skills.
8. You have been recognized for your skills at motivating subordinates. and
9. You have been recognized for your skills in resolving disputes between managers.
Business Process Thinking Skill (BPTS)
Before continuing we wish to clarify what we mean by a process and a task. Making a cake is a process, beating the
eggs that go into the cake is one task involved in the baking the cake process. Putting the icing on the cake is
another task. The six sigma quality improvement process is made up of the following tasks in order: definemeasure-analyze-improve-control. The difference between task and process is the difference between part and
whole. A task is a unit of work, a business activity often performed by one person. A process, in contrast, is a
related group of tasks that together creates a desired product or performance improvement.
1=extremely uncharacteristic of you (not at all like you)
2=somewhat uncharacteristic
3=uncertain
4=somewhat characteristic
5=extremely characteristic of you (very much like you).
1. I am very good at finding where the problems are in a work process.
2. I am not very good at understanding the logic underlying a work process. R
3. I am not very good at thinking of better ways of doing things at work R
4. I am able to quickly understand complex processes at work.
5. I am very creative and out-of-the box in my thinking about how to do things at work.
6. I am very good at simplifying a work process (a way of doing something).
37
7.
8.
9.
10.
11.
12.
I am not very good at coming up with new solutions to work process problems. R
I am not very good at work process improvement. R
I am very good at thinking about how one task in a work process affects future tasks.
I am not very good at designing work processes. R
I am very good at making work processes more efficient.
I am very good at making work processes very reliable.
Political Skill (PS) Source: Ferris et al. (2005)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
I spend a lot of time and effort at work networking with others.*
At work, I know a lot of important people and am well connected.
I am good at using my connections and network to make things happen at work.
It is important that people believe I am sincere in what I say and do.
When communicating with others, I try to be genuine in what I say and do.
I always seem to instinctively know the right things to say or do to influence others.
I have good intuition or savvy about how to present myself to others.
I am particularly good at sensing the motivations and hidden agendas of others
I am able to make most people feel comfortable and at ease around me
It is easy for me to develop good rapport with most people.
Note. These 10 items received the highest loadings in Ferris et al. (2005, Table 1, p. 136).
Need for Cognition (NC) Source: Cacioppo, Petty, and Kao (1984)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
I would prefer complex to simple problems. *
I like to have the responsibility of handling a situation that requires a lot of thinking.
Thinking is not my idea of fun.
I would rather do something that requires little thought than something that is sure to challenge my thinking
abilities.
I try to anticipate and avoid situations where there is a likely chance I will have to think in depth about
something.
I find satisfaction in deliberating hard and for long hours.
I only think as hard as I have to.
I prefer to think about small, daily projects than long-term ones.
I like tasks that require little thought once I’ve learned them.
The idea of relying on thought to make my way to the top appeals to me.
I really enjoy a task that involves coming up with new solutions to problems.
Learning new ways to think doesn’t excite me very much.
I prefer my life to be filled with puzzles that I must solve.
The notion of thinking abstractly is appealing to me.
I would prefer a task that is intellectual, difficult, and important to one that is somewhat important but does
not require much thought.
I feel relief rather than satisfaction after completing a task that required a lot of mental effort.
It’s enough for me that something gets the job done; I don’t care how or why it works.
I usually end up deliberating about issues even when they do not affect me personally.
Process Learning Skill (PLS)
1.
2.
3.
4.
5.
6.
I often forget how to do things. * R
I am a quick learner of a new job or new operating procedure.
I am not very good at learning new processes (ways of doing things). R
I have a very good memory for how to do things.
I am very good at learning a practice or procedure by observing someone else do it.
I only need to do something once to remember how to do it.
Process Implementation Skill (PIS)
1.
2.
I am not very good at implementation (getting things done).* R
I am very good at managing my time and activities.
38
3.
4.
5.
6.
7.
8.
*
I am not very good at thinking several steps ahead. R
I am very good at prioritizing tasks and activities
I am not very good at multi-tasking (doing several things at the same time). R
I am very good at thinking about how a whole lot of operational tasks and procedures fit together.
I am very good at action planning
I am not very good at thinking through the execution of a project, program or campaign. R
The following scale was used in these measures
1=extremely uncharacteristic of you (not at all like you)
2=somewhat uncharacteristic
3=uncertain
4=somewhat characteristic
5=extremely characteristic of you (very much like you).
Relative Income
Please think about the median annual income (including all bonuses etc.) for someone with your years of work
experience in your functional area/profession. Please indicate approximately how much higher or lower your
annual salary is compared with this median using the following scale.
If you think your income is only 50% of this median income 50%
60%
70%
80%
90%
If you think your income is about at the median…………….100%
110%
120%
130%
140%
If you think your income is about 50% higher………………150%
160%
170%
180%
190%
If you think your income is about twice the median………...200%
If you think your income is about three times the median…..300%
My salary (including all bonuses etc.) is about ___% of the median for someone with my years of professional
work experience.
39