We have seen in the first part what are the best practices, and we centered the discussion around will these practices be successful if they were implemented, considering that factors are different from business to other.
In this part, I will demonstrate a model that shows what factors that affect the imported best practice, and how these factors can lead to its success, failure, or even perform some adjustments to fit.
We can classify what contributes to the success or failure of the best practices as:
- Environmental factors.
- Business related factors.
Figure 1 : Environmental & Business-related Factors influence the success or failure of the best practice.
1. Environmental factors:
By the Environmental factors we point to variables that are not controlled by the business. These factors would include:
- Economy.
- Culture & Context.
- Competition.
- Technology & Innovation.
- Regulations.
Economical factors can have major role in making what is efficient in one country to be inefficient in another. Businesses in Countries with advanced and stable economy can focus more in developing practices that fit this stability. Such as, import and export orientation (balance of trade) of the country, Cross domestic production (GDP) or Cross Domestic Income (CDI), Exchange rates and currency stability, Natural resource economics, and others. Let us take one best practice from an IT company in a country with a strong economy like Germany and try to apply it in company in such country as Rwanda. Without doubt, adjustments have to be taking to ensure the success of the practice because of the differences in the two economies.
Is a certain county’s economy leaning toward Capitalism, socialism, or in-between, this can have an impact on the best practice success.
Cultural and demographical mix, would make a difference in the best practice implementation. Take a look at “Hofstede’s Framework” for assessing cultures (3), we see how cultures in countries have different orientations toward the Cultural Dimensions, which are:
- Power distance.
- Individualism vs. collectivism.
- Masculinity vs. femininity.
- Uncertainty avoidance.
- time orientation.
Here how it differs. If a best practice would heavily relay on collaboration and communication between superiors and subordinates, this best practice can work in countries with short power distance, but could be faces with resistance in country with a long power distance culture.
With intense competition between rivals in many industries, being able to perform using best practices will definitely give you an advantage. But companies are looking to have THE competitive advantage over others. So best practices are affected by the severity of the competition. Sustaining the same best practice for a long time is not the case in dynamic industries. So yes, best practices are being and will be affected by the competition levels in industries.
With new technologies and innovations taking place each and every day, people are changing their ways of doing thing, not only on the professional aspects but also on the personal levels.
If we go 20 years behind, we can see how things were done in companies. With new technologies bushing their way to the different aspects of companies, old methods of conducting work became obsolete. Perhaps in the past these methods were considered as best practices, or I might say efficient methods.
Enterprise Resource Planning systems, Business Intelligence systems , CRM’s, SCM’s and other Information Systems trends are all changing the way work is done.
Obviously, some best practices require certain regulations and laws to make them work as planned. But when these regulation are missing to not approves in a country, the best practice become useless. It may require minor or major adjustment to be applicable.
This may rise the point of how flexible these best practices are, with these Environmental factors applying pressure on the success or failure of the best practices.
2. Business related factors:
Sometimes, the success or failure of a certain best practice depends on factor within the company itself. This does mean that this best practice is not efficient or obsolete, but it is not applicable to this company because of inside factors. I have listed probable business related factor that may influence best practices internally :
- Management & employee practices.
- Costs & Benefits.
- Availability of resources.
We know that when new processes of systems are to be introduced to a company, resistance is going to rise in the horizon. People tend to be comfortable with old ways for several reasons. These reasons include: people with the old way may hide or manipulate information which gives them power and the desired “wrong” fulfillment, or it might be the case laziness!! So this best practice might change the current status to another. This is one case which is related to resistance.
Maybe the new best practice requires the company to be in decentralized form. But the company is highly centralized. This should create confusion to the management, especially if it is deeply rooted in this kind of management practice. So if it to be applied under this condition, this could result in gigantic failure.
Best practices are established to make work more efficient with less cost. And we know that companies measure success in monetary values. So whatever generates more or cost less is good for them.
But suppose, in one way or another, that this best practice generated opposite results, sure the company will spot work under this best practice. Maybe the problem is from the company itself didn’t do the practice as it suppose to be done, or other factors (could be Environmental).
Some practices might require certain resources to be available (IT, human capital, money, etc) in order to work as planned. But suppose that one key resource is not missing or not available in the desired quantity or quality, such thing will result in inefficient practice which in turn will lead to worse rather than best performance.
To sum up what is discussed above, best practices are there to help organizations improve their performance, causing cost reduction, enhanced productivity, and increased revenue. Yet, these practices are subject to factors that might affect their effectiveness and success, leading to failure or even much worse performance. These factors could be Environmental, that are beyond the control of organizations, or Business- related factors within organizations context.
References:
(3) : http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/
Regardless of the limitations of this study, it proved to be correct in a general form if comparing two countries to each other.
