What Results When Firms Implement Practices: The Differential Relationship between Specific Practices, Firm Financial Performance, Customer Service, and Quality

Journal of Applied Psychology, Forthcoming

Marshall School of Business Working Paper

33 Pages Posted: 16 May 2007

See all articles by Christina B. Gibson

Christina B. Gibson

University of California, Irvine - Organization & Strategy Area

Christine Porath

University of Southern California - Marshall School of Business; Georgetown University - Department of Management

George S. Benson

University of Texas at Arlington

Edward E. Lawler

University of Southern California - Marshall School of Business

Abstract

Previous research on organizational practices is replete with contradictory evidence regarding their effects. Here, we argue that these contradictory findings may have occurred because researchers have often examined complex practice combinations, and have failed to investigate a broad variety of firm-level outcomes. Thus, past research may obscure important differential effects of specific practices on specific firm-level outcomes. Extending this research, we develop hypotheses about the effects of practices that 1) enable information-sharing, 2) set boundaries, and 3) enable teams on three different firm-level outcomes: financial performance, customer service, and quality. Relationships are tested in a sample of observations from over two hundred Fortune 1000 firms. Results indicate that information-sharing practices are positively related to financial performance one year following implementation of the practices; boundary-setting practices are positively related to firm-level customer service; and team-enabling practices are related to firm-level quality. No one set of practices predicted all three firm-level outcomes, indicating practice-specific effects. Our findings help resolve the theoretical tension in the literature regarding the effects of organizational practices, and offer guidance as to how to best target practices to increase specific work-related outcomes. Implications for theory, research, and practice are discussed.

Keywords: empowerment, firm practices, firm financial performance, customer service, quality

Suggested Citation

Gibson, Christina B. and Porath, Christine and Benson, George S. and Lawler, Edward E., What Results When Firms Implement Practices: The Differential Relationship between Specific Practices, Firm Financial Performance, Customer Service, and Quality. Journal of Applied Psychology, Forthcoming, Marshall School of Business Working Paper, Available at SSRN: https://ssrn.com/abstract=986406

Christina B. Gibson (Contact Author)

University of California, Irvine - Organization & Strategy Area ( email )

Irvine, CA
United States

Christine Porath

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

Georgetown University - Department of Management

3700 O Street, NW
Washington, NY 20057
United States

George S. Benson

University of Texas at Arlington ( email )

415 S West St Apt no 205
Arlington, TX 76019
United States

Edward E. Lawler

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

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