International Review of Business Research Papers

Vol.5 No. 1 January 2009 Pp.1-10

Effective Management Performance
A Competency-Based Perspective

Ali Shirazi1 and Saeed Mortazavi2

The uncertainty and unpredictability of future events has stimulated interests in

research on the nature and characteristics of changes and trends that will be
likely to drive competitive performance in the future. Many prominent scholars,
including Toffler, Drucker, Handy and Naisbitt, have attempted and identified
key drivers of change in the 21st century. The study reviews the current schools
of thought in futures studies and major business forecasts in order to highlight
the key areas of change in business environment and management. A survey
questionnaire was designed and administered to determine the perceptions of
managers about managerial competencies and effective managerial
performance. The findings revealed that managers’ performance in the coming
decade is primarily measured against the quality of their relationships with
customers, followed by communication, team-building, goal accomplishment
competencies. Effective management performance is essentially linked to
managers’ ability to manage relationships, processes and time.

Field of Research: management performance, competency, future competencies,

effective managers

1. Introduction

Organizations have long been concerned with improving productivity of their resources.
Further, it is widely recognised that organization effectiveness is inextricably linked to
their management performance (Drucker, 1991; Armstrong, 2006). A vast number of
published works has described and discussed this role and its effects. One research
area, which has attracted researchers’ and business world attention, seeks to find out
who managers are, what they do, what they have in common and finally how they differ
from their subordinates. It is argued that organizations benefit from this type of research
through gaining knowledge about the manager-organization performance relationship.
This knowledge can motivate organisaions to identify the types of managers that are
suitable and effective for their long-term needs and success (Boyatzis, 1982; Spencer
and Spencer, 1993). The aim is to identify the correct match between managers,
managerial jobs, and organization objectives. However, one of the critical shortcomings
of this type of research is that they are retrospective in analytical approach and primarily
deals with identifying individual characteristics or competencies needed for the present
(Shackleton, 1992; Woodruffe, 1992). This research is set out to address this issue.

1
. Dr. Ali Shirazi, Director of Centre for Management & Market Studies, Ferdowsi University of Mashhad, email: a-shirazi@um.ac.ir
2
. Dr. Saeed Mortazavi, School of Administrative Studies & Economics, Ferdowsi University of Mashhad, email: mortazavi@um.ac.ir

1
 Shirazi and Mortazavi

2. Literature Review

2.1 Management Performance

Management performance is the extent and quality of managers’ contributions in
realising the objectives of their unit and organization. Cockerill (1989) suggests that this
is related more to the managers themselves than to their positions and authority within
the organization. Hence, managers’ performance depends not only on their experience
(seniority) as the traditional and bureaucratic organizations seem to stress, but the
competencies they bring into their job. Competencies are defined as the cognitive (e.g.
knowledge and skills), affective (e.g. attitudes and values), behavioral and motivational
(e.g. motivation) characteristics and dispositions of a person which enables him or her
to perform well in a specific situations (Ley, 2006; Boyatzis, 1982). Finn (1993) argues
that managers' performance (output competencies) is influenced by their attributes that
include task-related knowledge and experience (input competencies), and personality
characteristics (process competencies). This means that objective factors such as
experience and technical abilities, which were the key determinants of performance in
mass production economy of the past, are not sufficient for effective performance today.
An increasingly competitive world with its emphasis on technology and knowledge
workers highlights the importance of factoring in intangible capacities that are more
value-driven and behavior-based (Sveiby, 1997). Hence, competency-based
management approach was a response to inadequacy and ineffectiveness of job
analysis techniques in selecting, training and developing managers. It shifted the focus
from jobs to people who perform them. Some of the key competencies that have been
found to correlate with effective management performance include: 1) analytical thinking
(Boyatzis, 1982; Dulewics, 1989; Spencer & Spencer, 1993), conceptualisation
(Boyatzis, 1982; Schroder, 1989; Spencer & Spencer, 1993), concern with impact
(Boyatzis, 1982; Schroder, 1989), proactivity (Boyatzis, 1982; Schroder, 1989),
achievement-orientation (Dulewics, 1989; Schroder, 1989), communication (Dulewics,
1989; Schroder, 1989), interpersonal sensitivity (Dulewics, 1989; MCI, 1993), team-
building (Boyatzis, 1982; MCI, 1993; Spencer & Spencer, 1993), self-confidence
(Schroder, 1989; MCI, 1993, Spencer & Spencer, 1993).

2.2 Future Competencies

Future competencies are individual’s characteristics that are perceived to link to
performance in the future. One approach to determine future competencies is to
forecast future trends in business from which the future competencies are derived.
Forecasting futures is in the realm of future studies; a field of inquiry that uses current
knowledge and trends to forecast the future. Bolling (1996) defines the art of forecasting
as the collection of many lists of guesses and the construction of a scenario to predict
the future. Slaughter (1996), on the other hand, describes futurists as alternative
seekers, not forecasters. He suggests that looking ahead allows the society to influence
future decisions and actions, prevent things to go wrong, and increase informed
optimism and empowerment. In this context, the study of future is a dynamic and

2
 Shirazi and Mortazavi

proactive process with the aim of making the transition from present to future as
informed and stable as possible.

Seeing the future may be valuable but not simple. It is characterized by constant
change and chaos and therefore difficult to hypothesise with an acceptable degree of
accuracy. The greatest challenge in predicting the future is how to deal with complexity
that is associated with size, variety and difficulty (Frame, 1994). Clearly, as the world
becomes more complex and chaotic, more exogenous or unexplained variables enter
the analysis that inevitably contaminates attempts to predict the futures. In addition,
several other factors complicate future studies. First and foremost is time (Slaughter,
1999; Howe, 1993). How the future is interpreted depends on what time frames and
point of reference are used. The longer the time scale, the more complicated and
unreliable is the forecasts. Secondly, future studies are culture-bound. Different
societies have different value systems and beliefs which influence the assumptions
people make about the futures (Howe, 1993; Wagar, 1991). So future studies and
forecasts depend on how, why and what of forecasts and who the forecasters are.
Thirdly, since assumptions and extrapolations about the futures cannot be separated
from one’s personal views, religious convictions and cultural values, some forecasters
may be tempted to moralise future events. Hence, it is critical for forecasters to use their
intuitive and extrapolative skills to predict what the future will be, rather than what the
future should be. Fourthly, given the speed of knowledge generation and its increasing
interdependencies, forecasters should have interdisciplinary orientation to be able to
cope with uncertainty and conflicting evidence and still derive useful conclusions.
Finally, forecasting is more an art than a precise science. It relies on conjectures,
intuition and complex thought processes which are seldom in the realm of quantitative
methodology or amenable to statistical manipulations. Wagar (1991) argues for
‘suitability of methods’ when forecasting the future. He dichotomises the methods used
in futures studies into ‘hard’ and ‘soft’, corresponding to the distinction between the so-
called exact sciences perspective and the humanities perspective.

2.3 Key Components of Competitive Performance Model

These problems, albeit real and important, has not deterred futurists, government agencies and
practitioners from wanting to know about what is likely to happen in our planet, organizations,
schools and homes in the near or distant futures. In particular, Toffler, Drucker, Handy, and
Naisbitt have written extensively on organizational and managerial issues in the 21st century. An
analysis of the major future forecasts, either by frequency of concepts used by forecasters to
describe the future, or content analysis, reveals several key futures concepts. Identifying these
concepts, as argued by Slaughter (1999), enables a future discourse. This means that useful
futures concepts should be developed so that they can be used and understood by people at
different levels.
An analysis of future forecasts highlights the importance of three interdependent
business subsystems. At the market level, the business success is increasingly
depended upon its ability to adopt intelligent approach that involves understanding
customers’ diversity and its implications upon market demand and the supply of
company’s required resources (Porter, 1997; Hammer, 1997; Frame, 1994). In a

3
 Shirazi and Mortazavi

customer-focused business environment, organizations require radically a different

mindset, strategy and management skills from what was the norm in the stable and
supply-constrained environment of the past.

At organization level, there is a growing belief that the continuing technological

innovation, the primacy of customer and knowledge, the changing values and working
habits of the knowledge society demand different organizational form and emphasis.
Such a structure is characterised as being responsive, flexible and cross-activity
oriented. To achieve responsiveness and flexibility, organizations should bring decision-
making processes closer to work and people who influence work and customers. The
most appropriate form of organizations to enhance the interface between external and
internal customers uses a network structure (Drucker, 1991, 1999; Toffler & Toffler,
1997; Bennis, 1997: Karpin, 1995). Limerick and Cunnington (1993), in their review of
the literature, found that network organizations have loosely coupled networks and
alliances, in which units are responsive to each other but retain separateness and their
own identity. This requires management to promote empowerment and collaborative
individualism.

At the resource level, particularly as related to human resources, it is argued that the
ability to learn faster than one’s competitors is essential for business competitiveness
and success. Senge (1990) describes the learning organization as an organization
where knowledge workers are characterised by their generative capacities for change
and self-renewal. This highlights the constancy of change and deduces that continuous
learning is a logical response to minimise uncertainty and risks. Learning organizations
create continuous learning opportunities, encourage collaboration and team learning,
learn from their past mistakes experiences, promote inquiry and dialogue, and empower
people toward a collective vision. Figure 1 shows these interdependent drivers of
Competitive Performance (CP):

Customer

CP
Learning Network

Figure 1 Competitive Performance Factors in the 21st Century

It should be noted that no claim is made here to suggest that the proposed factors of
competitiveness are either new or exclusively future-specific. As Drucker (1999) points
out, the changes, particularly in areas such as quality improvement and customer
service, are already being felt in the business world with the prediction that their impacts
will accelerate in the future.

4
 Shirazi and Mortazavi

3. Methodology and Research Design

A survey questionnaire was designed and pilot-tested. It contained managerial

competency items related to customer-focused, networking and learning clusters as well
as other managerial competencies that have been found in the previous research to link
to effective management performance. Of the 625 managers who were invited to
participate in the study, 301 managers from major industries in public and private
sectors completed and retuned the questionnaire. The mean scores of items were used
to rate the perception of importance of each competency. Spearman’s correlation and
One-Way ANOVA showed no significance differences (p>0.05) between the
respondents, enabling the study to proceed without the need for separate analysis of
each category.

4. Findings and Discussions

The information on personal data indicates that the average respondent is male, 35-55
years old, with at least 5 years of work experience. He is likely to have a bachelor
degree in engineering and is working as a manager in the construction/property or
communication/information technology industry in the private sector.

Mean score of competencies were used to rate the perception of their importance.
Factor analysis was performed and thirteen factors, with eigenvalue greater than 1,
were obtained which accounted for 63.4% of the variance (Table 1). A principal
components analysis followed by a varimax rotation method with 125 iterations for
convergence. The factor pattern provided a relatively strong support for the structure of
the instrument.

5
 Shirazi and Mortazavi

Table 1. Factor analysis

Factor loadings
Competency Factor Factor Factor Factor Factor Factor Factor Factor Factor Factor Factor Factor Factor
1 2 3 4 5 6 7 8 9 10 11 12 13
DIALOGI 0.644
COLLABI 0.635
EXPERTI 0.632
EMPOI 0.624
FEEDI 0.623
COMI 0.618
SHAREI 0.565
INITI 0.558
MUTUAI 0.553
INVOLI 0.545
CONFERI 0.532
REFI 0.524
OBSERI 0.509
CLCONSI 0.761
CLADVI 0.754
CLWANI 0.739
CLLISTI 0.725
CLFEEDI 0.556
CLREQI 0.531
MOTIVI 0.575
TEAMI 0.522
RESISI 0.519
NEGOTI 0.509
ORGANI 0.738
PLANI 0.724
MISTI 0.579
PASTEXI 0.518
RISKI 0.501
STRESSI 0.638
OPTIONI 0.513
SELFCOI 0.504
OPPORI 0.729
COACHI 0.668
TECHI 0.66
SELFI 0.651
TOOLI 0.569
PERSUI 0.65
INFLUI 0.563
POLITI 0.56
FACTI 0.721
MEASI 0.563
CONPEI 0.703
FOLLOWI 0.539
RESPOI 0.664
GOALI 0.722
ACTIONI 0.631

Here, each factor and its components is briefly described.

Communication: This factor includes competencies in communication, networking and

learning clusters. It mainly describes the manager’s abilities to communicate effectively

6
 Shirazi and Mortazavi

in order to build collaborative relationships with team members in and out of

organization.

Customer-focused: The elements of this factor are highly correlated with the manager’s
performance. It is argued that effective performance is measured, to a significant extent,
by the quality of manager-customer relationships. The finding suggests that customers
expect managers to consult, advise, listen and act on their specific needs and
expectations.

Team-building: This factor emphasises the nature of managers’ jobs that heavily rely on
getting team members to do a quality job. The competencies comprising this factor
include the managers’ abilities to motivate and build effective teams.

Managerial: This is a generic competency factor that correlates manager’s effectiveness

with their organizational and planning abilities. These skills, if performed effectively, can
overcome many organization problems. The results suggest that effective managers
have an above-average ability to organise resources and plan ahead.

Learning-orientation: Experienced managers who are perceived to be effective, use

their learning curve to their advantage. They avoid past mistakes and reflect on their
experience when making decisions. Argyris and Schon (1978) point out that to avoid
repeating the same mistakes and improving organizational learning, the new
information, theories or models should be embedded in organizational memory.

Coping with stress: Managers encounter many stressful situations in the course of their
job. They are often called upon to mediate and resolve disagreements. In these
situations which sometimes lead to heated arguments and unprofessional behaviors, an
effective manager should set an example by staying calm, composed and at the same
time, decisive.

Training and Development: This factor is related to the contribution that a manager
makes in the personal and professional development of team members. Managers, who
spend time to coach team members to do their job and provide work challenges and
opportunities to learn new skills, are highly regarded.

Self-confidence: Whether a job faces a technical problem, interpersonal conflicts or

lacks organizational support, effective managers use their technical, interpersonal or
political skills to instil confidence in team members so that the tasks get done and the
job is moved forward. Leaders are often seen as being self-confident, assertive and
decisive.

Persuasiveness: This is a key factor that underlies leadership quality. It consists of the
ability to influence and be politically-skilled. Persuasive managers are able to resolve
interpersonal conflicts, secure the commitment of organization members, and forge
alliances with key team members.

7
 Shirazi and Mortazavi

Analytical: The findings suggest that although managers are essentially people-
oriented, they are required to make effective decisions to fulfil their control and
integration functions. The ability to collect factual data, to make informed decisions, and
to measure progress against predetermined milestones and targets, is a critical
requirement for effective performance.

Control: Managers are not only goal-setters, but ensure that tasks get done within unit
constraints and customer’s expectations. The findings emphasise that once goals and
tasks are set or negotiated, managers should follow-up what has been agreed and
promised.

Taking responsibility: This factor highlights the manager’s primary organizational

responsibility, which is the efficient and effective completion of tasks. Although
managers’ positional power is not often matched with what is expected of them, once
they accept to lead a team, they cannot pass on responsibility or blame others for failing
to achieve organization objectives.

Goal/action: Managers’ decisions and behaviors should always be seen in terms of their
effects on overall goals. This is because tasks are initiated to fulfil specific needs.
Managers through their organizations are selected to realise these goals and therefore
satisfy customer’s needs.

The findings show that an effective manager may be characterized as being responsive,
proactive, effective communicator, team-builder/motivator, negotiator, and decisive. The
study also supports the view, expressed by business management writers, that
competitive business environment is making organizations more customer-focused.
Managers seem to have responded proactively to this call and are paying a lot more
attention to market pressure.
However, network and learning competencies were not rated highly in effecting
managerial performance. This may be related to what managers perceive to be their job
priorities and immediate concerns in a fast moving and competitive business
environment. The findings may also suggest that most managers are not strategically
positioned to realize the benefits derived from learning or long lasting collaborative
relationships. They are essentially driven by short-term goals of their units, and tangible
and immediate feedback (e.g. customer satisfaction) than long-term organization
objectives. Further, since networking and learning are new performance constructs,
respondents might have been unfamiliar with the specific elements of the constructs
and their practical applications. Despite this finding, some studies support the effects of
learning and networking competencies on managerial performance. For example,
Robson (1993) found that poor record of performance is one of the key problems in
construction industry. He argues that the industry needs the skills of reflection to form a
learning base that can be used to promote innovation and change. In another study,
Teare et al. (1998) compiled evidence on networking in the UK and the US companies.
The findings showed that these companies are characterized by increased commitment
and motivation, improved communication, a sense of learning and satisfaction derived
from a blend of team members’ skills and abilities.

8
 Shirazi and Mortazavi

5. Conclusion

Most claims on the importance of learning and networking constructs in effective

performance lack empirical supports. Further, there seems to be confusion over the
appropriate language to describe these constructs. Most writers have failed to separate
these constructs from similar managerial concepts, such as teamwork and training.
Instead, it should be recognized that the criteria used to measure the effectiveness of
these concepts differ from those used in assessing qualities exhibited by people
working in organizations. Therefore, the future research should be clear on concept
definition and behavioral manifestation of elements of each competency. It may also be
helpful to conduct longitudinal studies to support the theoretical propositions with
credible empirical findings.

References
Argyris, C. and. Schon, D.A. 1978. Organizational learning, Addison-Wesley,
Massachusetts.
Armstrong, M. 2006. Performance management: Key strategies and practical
guidelines, (3rd ed.), Kogan Page.
Bennis, W. 1997. “Becoming leader of leaders”, in Gibson, R. (Ed.), Rethinking the
future. Nicholas Brealey Publishing, pp.149-63.
Bolling, G. F. 1996. The art of forecasting, Gower.
Boyatzis, R.E. 1982. The competent manager: A model for effective performance, John
Wiley & Sons.
Cockerill, T. 1989. “The kind of competence for rapid change”, Personnel Management,
September, p.55.
Drucker, P.F. 1999. Management challenges in the 21st century, HarperCollins
Publishers.
Drucker, P.F. 1991. Drucker in the Harvard Business Review, Harvard Business Review
Publishing.
Dulewicz, V. 1989. “Assessment centre as route to competence”, Personnel
Management, November, pp.56-9.
Finn, R. 1993. A synthesis of current research on management competencies, Henley-
on-Thames, Henley Management College.
Frame, J.D. 1994. The new project management: Tools for an age of rapid change,
corporate engineering, and other business realities, Jossey-Bass.
Hammer, M. 1997. “Beyond the end of management”, in Rethinking the future. Gibson,
R. (Ed.), Nicholas Brealey Publishing, pp.96-104.
Howe, L. 1993. “Predicting the future”, in Predicting the future. Howe, L. and Wain, A.
(Eds.), Cambridge University Press, Cambridge, pp.1-7.
Karpin, D. 1995. Enterprising Nation: Renewing Australia’s managers to meet the
challenges of the Asia-Pacific century, Australian Government Publishing Service.
Ley, T. 2006. Organizational competency management: A competency performance
approach, Unpublished PhD dissertation: University of Graz, Graz.

9
 Shirazi and Mortazavi

Limerick, D. and Cunnington, B. 1993. Managing the new organization. Business and
Professional Publishing, Sydney.
MCI 1993. Introducing management standards. National Forum for Management
Education and Development, London.
Porter, M.E. 1997. “Creating tomorrow’s advantages”, in Rethinking the future. Gibson,
R. (Ed.), Nicholas Brealey Publishing, pp.48-61.
Robson, C. 1993. Real world research. Blackwell, Oxford.
Schroder, H.M. 1989. Managerial competence: The key to excellence, Kendall and
Hunt.
Senge, P.M. 1990. The fifth discipline: The art and practice of the learning organization,
Doubleday & Currency, New York.
Shackleton, V. 1992. “Using a competency approach in a business change setting”, in
Designing and achieving competency. Boam, R. and Sparrow, P. (Eds.), McGraw-
Hill, London.
Slaughter, R. A. 1999. Futures for the third millennium. Prospect Media, Sydney.
Slaughter, R. A. 1996. New thinking for a new millennium, Routledge, London.
Spencer, Jr., L.M. and Spencer, S.M. 1993. Competency at work: Model for superior
performance, John Wiley & Sons.
Sveiby, K.E. 1997. The new organizational wealth, Berrett & Koehler, San Francisco.
Teare, R.E.1998. “Interpreting and responding to customer needs”, Journal of
Workplace Learning, Vol.10, No.2, pp.76-94.
Toffler, A. and Toffler, H. 1997. Foreword, in Rethinking the future. Gibson, R. (Ed.),
Nicholas Brealey Publishing.
Wagar, W.W. 1991. The next three futures, Adamantine Press Limited, p.5.
Woodruffe, C. 1992. “What is meant by a competency?”, in Designing and achieving
competency, Boam, R. and Sparrow, P. (Eds.), McGraw-Hill, London.

10