Rijksuniversiteit Groningen
Faculty of Management & Organisation
Analysis of the performance
management system of X
Final academic thesis
Master International Business & Management
June 2007
Student: Pieter de Jager (1412655)
Supervisors:
University of Groningen
First supervisor: Dr. A. Saka-Helmhout Second supervisor: Mr. Drs. H.A. Ritsema
Organisation X
International business & Management
Master thesis
TABLE OF CONTENTS MANAGEMENT SUMMARY 1. INTRODUCTION 7 2. PROBLEM STATEMENT 8 2.1 Problem statement 8 2.2 Research objective 9 2.3 Main question and research questions 10 2.4 Lay-out of research 10
3. LITERATURE REVIEW INNOVATION 12
3.1 What is innovation? 12 3.2 Types of innovation 13 3.2.1 Product innovation 13 3.2.2 Position innovation 13 3.2.3 Process innovation 14 3.2.4 Paradigm innovation 14 3.3 Management innovation 14 3.4 Why performance management is a management innovation 17 3.5 Concluding remarks 18
4. LITERATURE REVIEW DIFFUSION 19
4.1 What is diffusion? 19 4.2 Variables of the diffusion process 20
4.2.1 Innovation 20 4.2.1.1 Relative advantage 21 4.2.1.2 Compatibility 22 4.2.1.3 Complexity 23 4.2.1.4 Trialability 23 4.2.1.5 Observability 24 4.2.2 Communication channels 25 4.2.3 The social system 25
5. METHODOLOGY 31
5.1 Type of research 31 5.2 Population 32 5.3 Data collection 33 5.4 Concluding remarks 36
6. CASE STUDY X Not included
7. ANALYSES, CONCLUSION AND RECOMMENDATIONS 37
7.1 Analysis innovation 37 7.1.1 Analysis relative advantage 37 7.1.2 Analysis compatibility 38 7.1.3 Analysis complexity 39 7.1.4 Analysis trialability 40 7.1.5 Analysis observability 40 7.1.6 Concluding remarks innovation 42 7.2 Analysis communication channels 43
7.2.1 Concluding remarks communication channels 43 7.3 Analysis the social system 44
7.3.1 Analysis national culture 44 7.3.2 Analysis organisational culture 45 7.3.2 Concluding remarks the social system 46 7.4 Conclusion performance management system 47 7.5 Recommendations towards a better performance management system 48 7.6 Recommendations for future research 49 7.7 Limitations 50
MANAGEMENT SUMMARY
Due to globalisation competition has become fiercer than ever before. Hyper competition pushes companies and employees to give their best in order to survive. One of these methods to survive is innovation.
Firms generally engage in innovation for achieving an increase in quality of products, a reduction in production cost, capture or create new product markets, and reduce the firm s reliance upon unreliable factors of production. Innovation is then defined as incremental innovation; improving an already existing product or service (Webster, 2004).
However, what is often forgotten is that not only the products or services a company produces are subjected to innovation. Also the company itself and its management are subjected to innovation. This means that in order to drive the innovation process within the company it has to adapt to differing
circumstances, both externally as internally, and to, maybe, alter the way of management style.
That is why X introduced a performance management system to monitor the performance of its employees and to enhance it. Research shows that to seduce employees to give their best, personal and company objectives should be aligned. In that good performance of the employees benefits the company which will also benefit the employee.
This research looked specifically at the X division of X. Although the largest division of the company it is also the most troublesome due to the fast changing taste of consumers. Fast selling products this year could be the troublesome products of next year.
In 2003/2004 performance management was introduced to the X employees. After an initial successful pilot project among senior management, the board of directors decided to cascade the system further down the organisation.
However, due to a slow working tool and start-up problems this was not the success hoped for. The second year 2004/2005 looked promising but was again no success due to another IT technical failure and arisen negative sentiment towards the performance management.
As X is aware that having a performance management system is no longer an option but a necessity in order stay competitive, this research was launched to make an analysis of its performance management system, to find out what the problems are and, more importantly, how these can be overcome to let the process progress.
Using an adapted model of Rogers (1995) three elements where selected that are part of every adoption and diffusion process; the innovation itself,
communication channels and the social system the innovation has to diffuse in, to make an analysis. From this analysis it became clear that in general the performance management system is a very good system which has all the basic elements in it which you would expect from a good performance management system.
performance management system. Due to the problems in prior years a lot of participants have developed a negative sentiment towards the performance management system because of bad experiences in prior years. Arensberg and Niehoff (1964) defined this as innovation negativism. The solution to this problem is as simple as it is effective; communication. From the interviews, that were held to obtain empirical information, it became clear that participants were suffering from a lot of uncertainty due to the problems that were
surrounding the performance management implementation. There was no clear course of action as what was expected of them and how arisen problems were to be solved.
Admitting that the performance management system was not a success and acknowledging that this caused a lot of uncertainty and stress by Human Resources (HR) is a first step towards a new kind of performance
management system, a fresh start. Extensive communication of HR towards all participants should lead to a disappearance of the negative sentiment surrounding performance management. Convincing and persuading all participants, both managers and employees, to adopt the performance management system should lead to an understanding that performance management is designed to help improve the performance of its participants. That is also why it is a dialogue between you and your manager according to X.
1 INTRODUCTION
Innovate or die seems to be the adagio of today s international business world. Everyday we can read the headlines of newspapers quoting the latest mergers that have taken place or new inventions that have been done by world famous institutes or multinationals. Companies realize that in order to compete in this world of hyper competition the answer is innovation (Abou-zeid, 2004).
Firms generally engage in innovation for achieving an increase in quality of products, a reduction in production cost, capture or create new product markets, and reduce the firm s reliance upon unreliable factors of production. Innovation is then defined as incremental innovation; improving an already existing product or service (Webster, 2004).
But what is often forgotten is that not only the products or services a company produces are subjected to innovation. Also the company itself and its
management are subjected to innovation. This means that in order to drive the innovation process within the company it has to adapt to differing
circumstances, both externally as internally, and to, maybe, alter the way of management style.
That will also be the focal point of this research; how do you manage the process of innovation within an organisation. Rogers (1995), Damanpour et
al., 1989), Tidd et al., (2001) and many others have already written several
articles concerning the difficulties one encounters when trying to manage innovation. One of the classical works in this field is that of Rogers; Diffusion of Innovations (1962) in which he extensively explains how the diffusion process takes place and examines what the inhibiters and enhancers of diffusion of an innovation are.
An important issue here, that should not be overlooked, is the fact that besides implementing an innovation one should also pay attention to the fact that an innovation is also really adopted by the specified group. Because what benefit does the implementation of an innovation have if it is not used? And how do you get your innovation to be implemented the way you want it to be? These kinds of questions, which are more in the field of social science, emphasize that national culture plays an important role in the diffusion of innovation. This research will try to answer these questions using a case study of X. Based on the theoretical blueprint that will be developed in first chapters this research will try to answer these questions for X and come up with
2 PROBLEM STATEMENT
Introduction
This chapter starts with the problem statement of this research in paragraph 2.1. In this paragraph the main research question will be presented as well as the sub-questions. Paragraph 2.2 will concentrate on the research objective and explain what the added value of this research is. Paragraph 2.3 will discuss the main question of this research along with the research questions. Finally this chapter will be concluded by paragraph 2.4 which will explain the further lay-out of this research, which is visualized by figure 2-1.
2.1 Problem statement
In today s business environment, there is no executive task more vital and demanding than the sustained management of innovation and change to compete in the new environment, companies must create new products, services and processes they must adopt innovation as a way of corporate life (Tusham & Nadler, 1986).
However, the process of getting an idea adopted is often very difficult. Many innovations require a lengthy period, often many years to get an idea adopted (Rogers, 1995). Therefore, a common problem many organisations face is how to manage the process of innovation and how to make sure that the innovation is implemented and used in the preferred way.
One of those organisations is X. Its division X uses a performance management system to drive innovation within its Human Resources. According to X;
Performance management is about a dialogue between you and your manager on your performance and personal development. The performance management process is supported by a tool that helps you and your manager prepare for your performance management meeting and to document the outcomes afterwards (X intranet)
Translated this means that X has developed a performance management system for all white collar employees (office employees) to enhance personal performance. At the beginning of every year targets and goals are set, in accordance with manager and employee, concerning the performance of the employee. During the year progress is monitored and, if necessary, action taken.
This year (2005/2006) X wants to roll out the performance management system to grade 50 (office supporting employees), and even make a start with including blue collar workers (factory workers). However, during the last implementation process several problems occurred. For example; the malfunction of the computer program (tool) and the not delivering of the new tool on time by IBM (computer manufacturer) so employees had to use the old program again, with all its problems. Besides the technical problems there was also a negative attitude towards the performance management process in general which increased due to the just mentioned problems. This came to light in the 2005 Employee Engagement Survey (EES). In this survey employees were asked what they thought of their employer, X. They were asked what they perceived as positive about working at X but also what they saw as points for improvement. From this survey it became clear that most employees do not see the performance management system as a contribution to a more transparent and equal performance evaluation that helps them improve their performance, which is why the performance management system was introduced. Participants indicated that they see it as an extra administrative burden that they would rather get rid off. This was also reflected in the way people gave meaning to the performance management system; partially filled in forms or no filled in forms at all, so an evaluation was not possible.
2.2 Research objective
The objective of this research is twofold. The first objective is to provide X with an analysis of its performance management system; what is going well within the performance management system process and what are points that need attention in order to increase the extent of diffusion of its performance
management system to create a more transparent and equal performance management system that is seen as an added value by X employees, a system that drives innovation in a sense that it triggers participants to innovate themselves and to do the best they can every day.
The second objective of this research is to contribute to the literature on the spread of information about the diffusion of management innovation. There have been written numerous articles and there has been extensive research on innovation of products and services in all its forms (Utterback, 1975; Schumpeter, 1982; Porter, 1990). The diffusion of management innovation has also received an increasing amount of interest as company executives realize that in order to survive in an ever more competitive environment they themselves have to adapt to the differing circumstances (Dell, GE). However, the fact that this type of innovation can be vital for the success or failure of the total or part of the organisation is to my opinion still not clear to many
2.3 Main question and research questions
As can be read from the above main question this research focuses on the diffusion process of performance management at X. To answer this question four research questions have to be answered.
The first two research questions will discuss what the variables are that enable or inhibit the diffusion of management innovation. During research question 1 the enablers of the diffusion of a management innovation are discussed and how these elements should be integrated to come to a comprehensive diffusion process. The lacking of this should answer research question 2; the inhibiters of diffusion of management innovation.
When it is clear what the enablers and inhibiters of diffusion of a management innovation are. Research questions 3 and 4 will address these same
questions for performance Management.
Answering these research questions should lead to a detailed answer on what variables enable and what variables inhibit the diffusion of management
innovation, and more specifically performance management, thereby answering the main question.
2.4 Lay-out of research
To enhance the reading and understanding of this research a lay-out of this research is given. Chapter 1 contained the introduction of this research; what is the main theme of this research and how is it connected to literature. Chapter 2 conveyed the problem statement and the research objectives; 1. to provide X with an analysis of its performance management system and 2. to
Research question 1
What variables enable the diffusion of a management innovation?
Research question 2
What variables inhibit the diffusion of a management innovation?
Main question
What are the variables that enhance or inhibit the diffusion of the management innovation,
performance management, within X?
Research question 3
What variables enable the diffusion of performance management?
Research question 4
innovation. The further lay-out of this research will be as follows. Chapter 3 and 4 will together form the literature review. Chapter 3 will deal with innovation. What is innovation? What types of innovation do you have and what is management innovation. This chapter will not deal with all sorts of innovation, only the most widely known types will be discussed and are meant to position management innovation; the special type of innovation this
research focuses on. Chapter 4 will discus the process of diffusion. What is diffusion and what variables influence the diffusion process. This literature review will be concluded with a theoretical model that will be used to analyse the performance management system of X. Chapter 5 will deal with the methodology used in this research; explaining why a case study research was done and what different data collection techniques were used. The case-study of X performance management system within X will then be the subject of chapter 6. This chapter will analyse the performance management system using an adapted theoretical framework of Rogers which was discussed in the literature review. This research will be concluded with chapter 7 where the analyses, conclusion and recommendations towards X will be presented as well as recommendations for theory and future directions for research and the limitations of this research.
Figure 2-1: Research lay-out
Chapter 1 Introduction Chapter 3 Innovation Chapter 4 Diffusion Chapter 5 Methodology Chapter 6 X case study Chapter 7
Analyses, Conclusion & Recommendations
Chapter 2
Problem statement
3 LITERATURE REVIEW - INNOVATION
This chapter is the first of two that together will form the literature review of this research. Together these chapters have the purpose to give meaning to the different definitions. As most of these terms have a wide variety of
interpretations as to what they exactly convey more clarification will contribute to a better understanding of this research. Chapter 3 will discuss the concept of innovation. Chapter 4 will deal with the concept of diffusion. Together these chapters will form the heart of this research and will be the basis on which an analysis will be made of the performance management system of X.
Introduction
In this chapter the concept of innovation is introduced. First a definition will be given as to what innovation is. Numerous scholars already touched upon this subject (Tidd et al., 2001; Drucker, 1985; Rogers, 1995) and this has led to many different interpretations of the same concept, therefore a definition is needed to clarify this concept. After having identified what innovation is this chapter will continue discussing the different types of innovation. Being aware that there are many sorts of innovations the discussed types should not be looked upon as exhaustive, they are nearly meant to highlight the most widely known streams; product, position, process and paradigm. These types of innovations are meant to position management innovation within the wide field of innovation.
3.1 What is innovation?
The term innovation has always been a complex term. One of the reasons is that it is often used as a synonym for change or creativity. The fact that it is not very clear what the meaning of the word innovation is makes that it is used for a variety of definitions. In its broadest sense the term comes from the Latin
innovare meaning to make something new (Tidd et al., 2001). According to several writers (Druckner, 1985; Teece, 1987) innovation is a process of turning opportunity into new ideas. This research will define innovation using a definition of Rogers;
A process, through which new ideas, objects and practices are created, developed or reinvented and which are new and novel to the unit of adoption
Rogers (1995)
3.2 Types of innovation
The concept of innovation is complex. A process, through which new ideas, objects and practices are created, developed or reinvented and which are new and novel to the unit of adoption (Rogers 1995). However, innovation needs to be more than an idea. Implementation, or actual use of an idea, has to occur in order to turn a new idea into an innovation (Damanpour and Evan 1984; Boyne et al., 2005a). Tidd et al., (2001) argue that there are four types of innovation; consequently the innovator has four pathways to investigate when searching for good ideas.
3.2.1 Product innovation
Product innovations are defined as new products or services or substantially improved products or services. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension. It does not matter if these new innovations have been developed by the company itself or by another company.They are introduced to meet new external user or market needs. Product innovations occur in the operating component and affect the technical system of an organisation and include the adoption of products (which are material) or services (which are intangible and are often consumed at their point of production (Kimberly and Evanisko 1981;
Damanpour and Evan 1984; Normann 1991). Three types of product innovations have been identified and tested (Osborne 1998; Walker et al., 2002). Total innovations involve providing new services to new users. Expansionary innovations involve a public organisation taking an existing service and providing it to a new group of users. The third type of product innovation consists of evolutionary innovations. These involve providing a new service to existing users. Osborne (1998) highlights a range of new services provided by voluntary organisations; these include emergency accommodation for adolescents and sex therapy services.
3.2.2 Position innovation
Position innovation changes the context in which the product or service is introduced. Position innovation is closely connected to product innovation the main difference is that instead of the physical product or service position innovation takes place by repositioning the perception of an established product or process in a particular user context. For example an old-established product in the UK is Lucozade originally developed as a glucose-based drink to help children and invalids during recovery. These associations with sickness were abandoned by the brand owners, SmithKline Beecham, when they re-launched the product as a health drink aimed at the growing fitness makers where it is now presented as a performance
3.2.3 Process innovation
Process innovations affect management and organisation. Process innovation refers to the development of new ways of managing the primary value-adding activities (i.e. those involved in resource transformation) of the firm with a view of making them more efficient or effective. They change relationships amongst organisational members and affect rules, roles, procedures and structures, communication and exchange among organisational members as well as between the environment and organisational members. Consequently, process innovations do not directly produce products or render services to users but indirectly influence their introduction (Damanpour et al., 1989; Damanpour and Gopalakrishnan, 2001). The literature identifies two types of process innovations (Edquist et al., 2001). Technological innovations are associated with changes in physical equipments, techniques and
organisational systems. Examples would include information technology, hardware (physical equipment) and software (organisational systems). Organisational innovations are innovations in structure, strategy and administrative processes (Damanpour, 1984) and could include new
management practices such as Total Quality Management or the introduction of a new organisational structure (Walker et al., 2002).
3.2.4 Paradigm innovation
Paradigm innovation changes the underlying mental models which frame what the organisation does. One of the prime examples of that is Henry Ford who changed the work approach from hand-made car manufacturers to mass produced cars. A more recent example is the shift to low-cost airlines, the possibility of online shopping, and the repositioning of drinks like coffee and fruit juice as premium designer products. Although in its latter days Enron became infamous for financial malpractice it originally started out as a small gas pipeline contractor which realized the potential in paradigm innovation in the utilities business. In a climate of deregulation and with global
interconnection through grid distribution systems energy and other utilities like telecommunications bandwidth increasingly became commodities which could be traded much as sugar or cocoa futures.
3.3 Management innovation
Besides the formally mentioned types of innovation there has erected a new kind of innovation; management innovation. Management innovation can be defined as a marked departure from traditional management principles, processes, and practices or a departure from customary organisational forms that significantly alters the way the work of management is performed. It changes how managers do what they do (Hamel, 2004). This is primarily the managing of the whole process of innovation. Where the formerly mentioned types of innovation refer to a specific type of innovation; product innovation, process innovation or a specific part of the innovation; position innovation, paradigm innovation, management innovation covers all of these types or parts of innovation. It is a hybrid combination with elements of all sorts of types and parts of innovation. Birkinshaw et al., (2005) has captured this best, therefore this research will define management innovation using that
The implementation of a new practice, process or structure that significantly alters the way in which the work of management is performed and furthers organisational goals.
Birkinshaw et al., (2005)
Why this definition captures the essence of management innovation best, will be explained based on the constructed four pillars of Birkinshaw et al., (2005) below.
First, management innovation involves implementation. In the field of technology management, it is normal to distinguish between invention (the initial idea or scientific breakthrough) and innovation (the development of a viable product or process from the initial idea). Similarly, the development of a new management idea by an academic or a consultant is conceptually
different from a management innovation, which involves implementing the idea in a business setting (Gruber and Niles, 1972; Davenport, Prusak, and Wilson, 2003). For example, Discounted Cash Flow (DCF) was invented in the
nineteenth century but was only implemented in France well into the 1950s (Pezet, 1997). A management idea has value to the academic community; a management innovation has value to the business community.
Second, management innovation has to be new to the adopting organisation. New here does not necessarily mean new to the world. Rather, it means the innovation in question involves a significant level of experimentation and risk on the part of the adopting organisation. If one considers a spectrum of approaches to the implementation of new management practices, on the left side a firm might buy an off the shelf practice from a consultancy (e.g. a stock-option plan for employees), and on the right side the firm could
hypothetically come up with a completely novel practice of its own (e.g. Danish hearing aid company Oticon s spaghetti organization , (Lovas and Ghoshal, 2000). New refers to those practices towards the right side of the spectrum in which the level of experimentation and adaptation is sufficiently great that the credibility of the internal sponsor is at stake. Thus, for example, the decision to implement SAP software in a firm may involve considerable effort and
adaptation, but the credibility of the decision-maker in choosing SAP would not be questioned (Abrahamson, 1999) because SAP is a widely respected
software producer and has already established its name and proven it can deliver quality products. As such, implementing SAP would not be a management innovation. On the other hand, the implementation of a new information system architecture would be a management innovation: it would require a great deal of justification and explanation, and would involve high risks for the individuals sponsoring it.
Third, the focus of management innovation is on the implementation of a new management practice, process or structure (Alänge et al., 1998). These terms are intended to cover the full spectrum of management activities: management practice refers to such things as pay-for-performance or brand management; administrative process refers to such things as Business Process
Reengineering or GE s Work Out; organisational structure refers to such things as the M-Form, the Matrix organisation, and the Joint Venture. This definition deliberately excludes analytical techniques, such as the 5-forces framework, core competence analysis, or shortest-path analysis, because they do not significantly alter the way management work is performed, and as such they do not incur the same risks or challenges in their implementation
implementation of new practice, process and structure that significantly alters the way management was performed. This means that management
innovation can be strategic in nature but that it is not necessarily strategic. The implementation of the formerly mentioned pay-for-performance does not require a change in the strategic course of the organisation; it does not alter the way the organisation functions, where as the implementation of a new organisational structure does. It depends on the depth of the management innovation as to conclude if it is strategic or not.
Fourth, management innovation is intended to further organisational goals. This may seem an obvious point, but it is important reason why firms are prepared to engage in the somewhat risky process of management innovation in the first place. It also hints at two related points:
First, not all management innovations are ultimately successful. Volvo experimented for many years with cellular manufacturing, for example, with the intention of delivering significant benefits, but the innovation was ultimately discontinued (Berggren, 1994). Second, organisational goals includes both traditional metrics of business performance (efficiency, effectiveness,
competitive advantage) as well as internal metrics, such as improved quality of working life for employees, lower turnover, and improved quality. It also
acknowledges the important role of external legitimacy as a factor in the decision to adopt new management practices (Staw and Epstein, 2000). With this definition in mind, it is useful to contrast management innovation with the concept of process innovation a type of innovation which seems very close related to management innovation. The main difference between process innovation and management innovation is that process innovation refers to the development of new ways of managing the primary value-adding activities (i.e. those involved in resource transformation) of the firm with a view to making them more efficient or effective. Management innovation, in contrast, is focussed on the supporting activities that surround the resource
transformation process, and which adds value to it. However, some
innovations, particularly those stemming from operations management, are really hybrids between management innovation and process innovation. Enterprise Resource Planning is a good example of a hybrid; it affects the production process directly, but is also changes the way resource
transformation is managed. Likewise, Total Quality Management affects the supply and transformation of inputs, but also has enormous implications for the way the firm is organized. That is why there is a continuum between process innovation and management innovation, with certain innovations portraying characteristics of both. The most notable difference between process innovation and management innovation is that management
innovation is much wider then process innovation in that it conveys the whole managing of the process of innovation. Including elements as; implementing the innovation in a business setting, taking risks implementing new
3.4 Why performance management is a management innovation
In this research performance management is seen as a management
innovation, based on the four pillars of Birkinshaw et al., (2005) an explanation will follow why this reasoning holds.
1. X really implemented the performance management system in 1997 for its senior management and also currently is really implementing the
performance management system in the rest of the organisation, thereby contributing a management innovation to the business community. 2. The performance management system was new to the adopting organisation. X had never dealt before with a performance management system. The performance management system was developed in-house by X self and was not an off the shelf product developed by a consultancy firm which had implemented the same system somewhere else. The fact that it needed a great deal of justification and explanation and was risky for the individuals sponsoring it makes performance management a
management innovation.
3. Although performance management did not change the strategic course of X this does not mean performance management is no management innovation. A management innovation can be strategic in nature but does not necessarily has to be strategic. The focus of this management
innovation is on the implementation of the performance management system to further improve the strategic goals of the company, not to alter them.
4. X developed the performance management system to further organisational goals. To enhance the performance of its employees and by connecting personal and company objectives to each other in order to improve the performance of the company.
3.5 Concluding remarks
This chapter dealt with the concept of innovation. It showed that there are many different definitions of the term innovation. Rogers (1995) captured the essence of innovation best; therefore this research uses this definition.
A process, through which new ideas, objects and practices are created, developed or reinvented and which are new and novel to the unit of adoption
Rogers (1995)
4 LITERATURE REVIEW - DIFFUSION
Introduction
This part of the research will discuss the concept of diffusion. The process of diffusion is an important part in the innovation process, without it an innovation often fails to realize its investment (Rogers, 1995). The concept of diffusion will be defined in paragraph 4.1. Paragraph 4.2 will then continue with
variables that are part of every diffusion process. Explaining their added value to the diffusion process every variable is discussed in great detail whereby every part is concluded with a proposition. This paragraph will also conclude the literature review of this research. In paragraph 4.3 the literature review will be visualized by figure 4-1 which shows the relationships of the variables influencing the extent of diffusion of innovation. Finally this chapter will be concluded with some concluding remarks in paragraph 4.4.
4.1 What is diffusion?
Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system. It is a special type of communication, in that messages are concerned with new ideas. Communication is a process in which participants create and share information with one another to reach a mutual understanding (Rogers, 1995). This definition implies that communication is a process of convergence (or divergence) as two or more individuals exchange information in order to move towards each other (or apart) in the meanings that they give to certain events. According to Rogers and Kincaid (1981) communication is a two-way process of convergence, rather than a one-way linear act, in which one individual seeks to transfer a message to another in order to achieve certain effects. So diffusion is a special type of communication, in which the messages are about a new idea. This newness of the idea in the message content gives diffusion its special character. Newness means that some degree of uncertainty is involved in diffusion. Uncertainty is the degree to which a number of
alternatives are perceived with respect to the occurrence of an event and the relative probability of these alternatives. Uncertainty implies a lack of
predictability, of structure, of information. In fact, information is a means of reducing uncertainty. A technical innovation embodies information and thus reduces uncertainty about cause-effect relationships in problem-solving. For instance, adoption of residential solar panels for water heating reduces uncertainty about future increases in cost of fuel. Diffusion leads to social change, defined as the process by which alteration occurs in the structure and function of a social system. When new ideas are invented, diffused, and are adopted or rejected, leading to certain consequences, social change occurs. Of course, such change can happen in other ways, for example, through a political revolution, through a natural event like a drought or an earthquake, or by means of a government regulation. Some authors restrict the term
4.2 Variables of the diffusion process
The former paragraph dealt with the concept of diffusion. This paragraph will deal with the three variables that are part of every diffusion process according to Rogers, (1995):
1. Innovation;
2. Communication channels; 3. The social system.
These variables will be discussed to show how each of these variables can enhance or inhibit the diffusion process. After every variable or part of a variable a proposition will be given that will be used in the case study to analyse the case of X performance management system.
4.2.1 Innovation
An innovation is an idea, or object that is perceived as new by an individual or other unit of adoption. It does not matter if it is new to the world or just new to the adopting individual or organisation. The perceived newness determines his or her reaction to it. The first element of the diffusion process is the innovation itself. In order to diffuse correctly through the organisation Rogers, (1995) displays five characteristics that have to be present. These are relative
advantage, compatibility, complexity, trialability and observability which will be discussed in successive order.
4.2.1.1 Relative advantage
One of the most often cited review of the perceived characteristics literature is that of Rogers (Bradley and Stewart, 2003), who in a survey of several
thousands of innovation studies, identified four characteristics of an innovation that affect the rate of diffusion of an innovation. In his book diffusion of
innovations , Rogers theorizes that, multiple variables influence the extent to which an innovation is adopted; one of the most important attributes is that of relative advantage. Relative advantage is the degree to which an innovation is perceived as being better than the idea it supersedes. The degree of relative advantage may be measured in economic terms, but social prestige,
and not on perceptions of actually using the innovation. Attitudes towards an object can frequently differ from attitudes towards a particular behaviour concerning that object. For example, a difference may exist between any employer s attitude towards a particular individual and his attitude towards hiring that individual. An employer may highly dislike the individual, but may nevertheless believe that hiring that individual will bring positive results. Therefore, the attitude towards hiring that person will be positive. Changing this need only needs rewording.
4.2.1.2 Compatibility
Rogers (2003) and Moore and Benbasat (1991) define compatibility as the degree to which an innovation is perceived as being consistent with the existing values, past experiences, and need of potentials adopters . An idea that is incompatible with the values or norms of the social system will not be adopted as opposed to an innovation that is compatible. The adoption of an incompatible innovation often requires the prior adoption of a new value
system, socio-cultural values and beliefs, which is a relatively slow and difficult process. An example of an incompatible innovation is the use of contraceptive methods in countries where religious beliefs discourage the use of family planning, as in certain Muslim and Catholic nations. Wellin (1955) illustrates that despite the obvious advantages of boiling drinking water before
consuming it, to eradicate germs in preventing diseases, Peruvian villagers did not adopt that innovation because it was against their cultural beliefs. Another example of incompatibility is the introduction of the bar-code reader by IBM in the 1970s for check-out stands in supermarkets. The reader could sum a series of product prices to a six-digit total, that is from 0 to 9,999,99 in US$ this amount is more than adequate since most US-customers spend less than US$ 100,00. For Italy however, which was experiencing a staggering rate of inflation in the 1970s, this figure was highly inadequate. As the average grocery shopping bill was more that 10,000 Lira. For Italy, the reader was completely incompatible.
Tabak and Barr (1998) speak in this context of controllability, which only slightly differs in definition from compatibility as the degree to which a
decision maker knows how to approach an innovation from past experiences . For example, the development of a new product that is not similar to any other product in the current product portfolio, and so that the lack of prior
experience, may contribute to perceptions of uncontrollability as opposed to a new product that is compatible with the current product. Tornatzky and Klein (2001) found that compatibility, along with relative advantage and perceived ease of use (complexity) are the attributes that produce significant results most frequently. Hirschman (1980) argues that previous experience in the innovation s domain leads to increased ability to recognize its potential advantages. The more compatible an innovation is, the less uncertainty is apparently associated with its adoption.
It has also been argued that previous experience in the innovation s domain leads to increased ability to recognize its potential advantages (Hirschman, 1980). Compatibility of an innovation with a preceding idea can either increase or decrease the extent of adoption. According to Rogers (1995), old ideas are
Proposition 1:
the main mental tools that individuals utilize to assess new ideas. If a preceding idea turned out to be a success, diffusion of a follow-up generally goes faster (Rogers, 1995). This can be argued rather intuitively: When someone is very familiar with using the internet. It is more likely that this person will adopt internet-related innovations like buying airline tickets via the internet or use internet banking, or make purchases via e-bay or similar websites. The opposite is also true; a negative experience with one innovation can damn the adoption of future innovations. Such innovation negativism (Arensberg and Niehoff, 1964) can be an undesirable aspect of compatibility. Innovation negativism is the degree to which one innovation s failure
conditions a potential adopter to reject future innovations. When one idea fails, potential adopters are conditioned to view all future innovations with
apprehension. An example of that is the Atari game computer when this turned out to be and outright failure, toy distributors were very reluctant to stock Nintendo game computers (Shelf, 1993). However, sometimes, this generalisation does not hold: Lievrouw and Pope (1984) state that if aesthetic innovations are too closely derivative of older work, they are unlikely to meet much critical or economic success. They found that artworks must be
somewhat radical if they are to diffuse wider (Lievrouw and Pope, 1984). Another way in which an old idea can influence the new idea is to be replaced by, is that people apply to innovation the way they did with the old ideas. For example, to Punjabi farmers it made sense to cover the hood of their tractors in winter with blankets as they did with their bullocks in former days, despite the warning that this could cause overheating of the engine, because they felt they had to take care of their source of power. However, cleaning the air filter and changing the oil filter on their tractor was not compatible with their
previous experience with caring for their bullocks (Carter, 1994). The last dimension of the compatibility of an innovation is the degree to which it meets a need. The first step in the innovation development process is to recognize that a need needs to be fulfilled. The better the felt needs are met, the likelier is it that people want to adopt (Rogers, 2003). Compatibility reduces the uncertainty of an innovation.
4.2.1.3 Complexity
Rogers (1962) defines complexity as the degree to which an innovation is perceived as relatively difficult to understand and use . Venkatesch and Davis (2000) define it as the perceived ease of use the degree to which a person believes that using a particular innovation would be free of effort .
Moore and Benbasat (2002) found that complexity, as defined by Rogers, and perceived ease of use are highly related to each other. Note however that the meanings of these two concepts are exactly opposite. One can better define complexity in the context of actually using the innovation. Therefore, it is easier to address this matter in terms of the perceived ease of use, as proposed by Davis et al., (1989) and Venkatesch and Davis (2000). Effort in adopting an innovation can mean learning. When a lot is involved in using an innovation, because the innovation is difficult to understand or handle, this increases the risk that the innovation will produce disappointing results. The harder it is to apply an innovation correctly, the likelier it is that it goes wrong. Understanding how a hairdryer works usually requires less effort then
Proposition 2:
so called sunk costs: they cannot be recovered once a decision to reject or discontinue is made (Hall, 2004). Effort can also mean physical effort. Doing laundry by hand requires a lot more physical effort than using a washing machine. Overall, it can be said that required efforts is an inhibitor of
innovation, so the degree to which using an innovation is free of this inhibitor is an enhancer of diffusion of innovation.
4.2.1.4 Trialability
Both Rogers (2003) and Moore and Benbasat (1991) include trialability in their model and use the same definition, which is also used in this research. Trialability is the degree to which an innovation may be experimented with on a limited basis. An innovation that can be tried out should be more adoptable than one that cannot, in that a trial helps reduce the degree of uncertainty. No matter how good an innovation might be, if it can not be tried out. It carries a degree of risk which inhibits its diffusion. Evidence of application of this principle exists in everyday marketing efforts, where free samples of new products are provided unsolicited to allow the customer a trial of the product. Test drives are very common when purchasing a car. Also tied to the notion of trialability is that of reversibility, the ability to reverse one s decision (exchange clothes within fourteen days). Along with reversibility, the ability to break down a larger innovation into smaller components that can be adopted one at a time is tied to trialability (Zaltman et al., 1973). An example of that are pilot projects. When major innovations are planned but innovators are unsure about the success they use pilot projects to test the reactions of the adopters and to be able to make changes if necessary. Rogers (1995) calls this learning by doing. Being able to try out an innovation has advantages for adopters as well as for innovators in that it reduces uncertainty.
4.2.1.5 Observability
According to Rogers (1980), observability is the degree to which the results of an innovation are visible to others. Moore and Benbasat (1991) turned this definition into visible and communicable to others . Venkatesch and Davis, (2000) define this concept as result demonstrability; the tangibility of the results of using the innovation.
The easier it is for individuals to see results of an innovation the more likely they are to adopt it. Such visibility stimulates peer discussion of a new idea, as members of the social system (colleagues, neighbours, family) of the adopter often ask about an evaluation of the adopter s experiences with the innovation. According to Rogers (1995), result demonstrability is the reason why computer hardware (the electronic equipment) and software (the computer programs) have different rates of adoption. The software component of a technological innovation is not so apparent to observation, so innovations in which the software aspect is dominant possess less result demonstrability, and usually have a relatively slower rate of adoption. Result demonstrability is a real
Proposition 3:
The less complex an innovation is perceived, the more widespread the extent of adoption
Proposition 4:
problem for innovations that have a preventive character. People do not immediately reap off benefit from adopting for example safe sex or eating healthy food, though it is highly beneficial on the long term for preventing all kinds of diseases like HIV/AIDS for the former and for instance cancer for the latter. Even effective systems can fail to garner acceptance if potential
adopters have difficulty attributing gains in their every-day life. Therefore, Venkatesch and Davis (2000) posit that result demonstrability will directly influence perceived usefulness in a positive manner. This connection has already been found: Agarwal and Prasad (1997) found a significant correlation between result demonstrability and usage intentions.
Although the former attributes help clarify the extent of adoption for a great deal. There is one other characteristic that should be mentioned in this
context; that of re-invention. In the first several decades of diffusion research it was assumed that an innovation was an invariant quality that did not change as it diffused (Rogers, 1995). However, from the 1970 s diffusion scholars began to study the concept of re-invention, which is defined as the degree to which an innovation is changed or modified by a user in the process of
adoption and implementation. Some researchers measure re-invention as the degree to which an individual s use of a new idea departs from the core or
mainline version of the innovation promoted by a change agency (Eveland et
al., 1977). Scholars discovered that an innovation is not necessarily invariant
during the process of its diffusion and adopting is not necessarily a passive role of just implementing a standard template of a new idea. Many adapters want to participate actively in customizing an innovation to fit their unique situation. They also found that an innovation diffuses more rapidly when it can be re-invented and that its adoption is more likely to be sustained. In order to realize that it is important to communicate.
4.2.2 Communication channels
Diffusion is a particular kind of communication in which the message content that is exchanged is concerned with a new idea (Rogers, 1995). The essence of the diffusion process is the information exchange through which one individual communicates the idea to one or several others. At its most elementary form, the process involves (1) an innovation, (2) an individual or other unit of adoption that has knowledge of, or experienced using the innovation, (3) another individual or other unit that does not have knowledge of, or experience with the innovation, and (4) a communication channel connecting the two units (Rogers, 1995). A communication channel is nothing more than a tool to get messages from one individual to another. The nature of the information exchange relationship between a pair of individuals determines the conditions under which a source will or will not transmit the innovation to the receiver and the effect of such a transfer. Mass media channels are usually the most efficient means of informing an audience of potential adopters about the existence of an innovation that is, to create awareness-knowledge. Mass media channels are all those means of
transmitting messages that involve a mass medium, such as radio, television, newspapers, and so on, which enable one or a few individuals to reach an
Proposition 5:
effective in persuading an individual to accept a new idea, two or more individuals who are similar in socioeconomic status, education, or other important ways. Interpersonal channels involve face-to-face contact between two or more individuals. In addition to mass media and interpersonal
communication channels, interactive communication via the internet has become more important for the diffusion of certain innovations in recent decades. Diffusion research shows that most individuals do not evaluate an innovation on the basis of scientific studies or its consequences, although such objective evaluations are not entirely irrelevant, especially to the very first individuals who adopt. Instead, most people depend mainly upon a subjective evaluation of an innovation that they were made aware of by other individuals like themselves who have already adopted the innovation. This dependence on the experience of near peers suggests that the heat of the diffusion process consists of the modelling and imitation by potential adopters of their network partners who have previously adopted. Diffusion is a very social process that involves interpersonal communication relationships.
4.2.3 The social system
Another element in the diffusion of new ideas is the social system. A social system is defined by Rogers (1995) as a set of interrelated units that are engaged in joint problem-solving to accomplish a common goal. The members or units of a social system may be individuals, informal groups, organisations, and/or subsystems. The social system constitutes a boundary within which an innovation diffuses. As this research focuses on the diffusion and adoption processes in an organisation this will be the part of the social system attention will be paid to. Rogers and Agarwala-Rogers (1976) define an organisation as a stable system of individuals who work together to achieve common goals through a hierarchy of ranks and a division of labour. This gives individuals in higher-ranked positions the right to issue orders to individuals of lower rank. Their orders are perceived to be carried out. However what is perceived by one individual as normal maybe perceived by another individual as non-normal, which is contingent upon national culture and to a lesser extent on company culture.
4.2.3.1 Culture
One of the factors that affect the social system is the culture. Culture is defined by Hofstede (1983) as "the collective programming of the mind which distinguishes the members of one category of people from another". The concept of culture can be divided into national culture and organisational culture. National culture is an involuntary attribute; we are born within a family within a nation, and are subject to the mental programming of its culture from birth. We also acquire here most of our basic values. Organisational culture is influenced by national culture. When we enter a work environment we are usually young or not-so-young adults, with most of our values firmly
entrenched, but we will become (voluntarily) socialized to the practices of our new work environment. National cultures, therefore, differ mostly at the level of basic values, while occupational and, even more, organisational cultures differ
Proposition 6:
more superficially (in their symbols, heroes and rituals). Although most authors speak of two kinds of culture they are intertwined.
4.2.3.2 National Culture
Values represent the deepest level of national culture, these are also the most difficult to deal with. The two most widely known researchers in this field are Hofstede and Trompenaars. This research will define the concept of national culture using the four dimensions of Hofstede. This definition was chosen as these four dimension help structure the national culture of a country along the lines of the four dimensions, identifying the type of national culture.
Power distance
Power distance, is the degree of inequality among people that the population of a country considers as normal: from relatively equal to extremely unequal it is the extent to which the members of a society accept that power in
institutions and organisations is distributed unequally. Individual vs. Collectivism
Individualism, is the degree to which people in a country have learned to act as individuals and to only take care of themselves and their immediate families only. Collectivism means that members of a cohesive group prefer a tightly knit social framework in which individuals can expect their relatives, clan, or other in-group to look after them, in exchange for unquestioning loyalty. Masculinity vs. Femininity
Masculinity is the degree of 'masculine values like assertiveness,
performance, success and competition, and material success; as opposed to: Femininity, which stands for "feminine values like the quality of life,
maintaining warm personal relationships, service, caring for the weak. In a masculine society even the women prefer assertiveness (at least in men); in a feminine society, even the men prefer modesty.
Uncertainty avoidance
Uncertainty avoidance is the degree to which members of a society feel uncomfortable with uncertainty, ambiguity or unstructured situations which leads them to support beliefs promising certainty and structure to maintain institutions protecting conformity.
Hofstede (1983) showed that European countries vary widely on all four dimensions. Power distances are large in France and Portugal; collectivism prevails over individualism in Portugal and Greece; Austria and Italy are very masculine, while Sweden and the Netherlands are very feminine; Belgium and France are uncertainty avoiding, while Denmark and the United Kingdom easily accept uncertainty. The research of Hofstede was also extended to other parts of the world such as Asia which showed that Asian countries are more collectivist, more feminine and have a greater power distance. All these differences affect the style of management in these countries. Large power distances favour centralisation, while small power distances favour
decentralisation. Collectivism favours group rewards and family enterprises, while individualism favours easy job-hopping and individual rewards.
Masculinity favours competition and survival of the fittest while femininity favours solidarity and sympathy for the weak. Uncertainty avoidance favours strict rules and principles, while its opposite favours opportunism and
Kong added a fifth dimension. This fifth dimension was called "long-term orientation" (LTO) as against "short-term orientation" (STO). This dimension looks at the time horizon people perceive, where long term means in the future and long term commitment and short term, now or in the direct near future. Most LTO countries can be found in East Asia: Hong Kong, Taiwan, Japan. Another important aspect of national culture is how to deal with it. Multinational companies frequently mention that the most valuable asset they have are the people they employ. Reason for this is that multinationals are held together by people. That is why personnel departments of these multinationals have to find a way between uniformity and diversity in personnel policies. Too much uniformity is unwarranted because no one is the same so imposing the same policies company wide is not an option. On the other hand multinationals need to build a corporate culture with unique features which keep the organisation together and provide it with a distinctive and competitive psychological advantage.
Expanding across national borders demands that managers have some insight in the extent to which familiar aspects of organisational life in that foreign country. Managers should be aware of the local organisational culture, leadership styles, motivational patterns, etcetera.
These issues should be reconsidered before borders are crossed. It also calls for self-insight on the part of the managers involved, who have to be able to compare their ways of thinking, feeling and acting to those of others, without immediately passing judgement. This ability to see the relativity of one s own cultural framework does not come naturally to most managers, who often got to their present position precisely because they held strong convictions (Brannen, 1999). Intercultural management skills can be improved by specific training; this should focus on working rather than on living in other countries. The focus in such courses is on recognizing one s own cultural programmes and where these may differ from those of people in other countries.
Employees should be made aware that things are interpreted in a different way then their used to. Training employees should lead to more cultural sensitivity.
Brannen (1999) however, cautions for the oversimplification of understanding cultural differences. She suggests that these are generalisations and that it does not necessarily have to mean that because a person is from a certain culture he or she must behave in a certain way. Furthermore Brannen (1999) suggests that experience shows that cultures are neither not nearly as
monolithic nor as static as studies suggest. There are considerable differences within cultures and they do change over time.
4.2.3.3 Organisational culture
While the membership of a nation is permanent and involuntary the
membership of an organisation is usually partial and voluntary. What a person has to learn when he or she joins a work organisation is mainly a matter of practices. Employee values have been developed in the family and the school; they play a role in the selection and self-selection process for the job.
activate latent values which employees were not allowed to show earlier: like a desire for initiative and creativity or by allowing practices which before were forbidden.
However, members only to a limited extent adapt their personal values to the organisation's needs. A work organisation, as a rule, is not a "total institution" like a prison or mental hospital. Organisational cultures reside at a more superficial level of mental programming than the things learned previously in the family and at school. In spite of their more superficial nature,
organisational cultures are still hard to change because they have developed into collective habits. Changing them is a top management task that should be based on a strategy and a cost-benefit analysis; there is no single formula for success. Knowing more about the cultural background of employees and thus their national culture can help management steer more effectively.
4.3 Theoretical model
This theoretical model forms the final piece of this literature review and visualises the interdependences of the elements that influence the extent of adoption. The theoretical model used is an adaptation of the model developed by Rogers (1995). The original model of Rogers analysed the variables that determine the rate of adoption. In this research the interest was not on the rate, and therefore speed of diffusion of innovation, but on the extent, spread of diffusion of innovation, this fundamental change of analysis lead to a change in the amount of variables that were analysed in this research. The original model conveyed;
Perceived attributes of innovations Type of innovation-decision
Communication channels Nature of the social system
Extent of change agents promotion efforts
As the focus was no longer on the rate of adoption but on the extent of adoption the variables; Type of innovation and Extent of change agent promotion efforts were excluded from the model as these two variables specifically deal with the rate of adoption of an innovation.
The adapted model of Rogers (1995) which is used thus contains the following variables to determine the extent of adoption;
Innovation
Communication channels The social system
Perceived attributes of innovations was replaced by innovation to make the concept more comprehensible although the content stayed the same. Communication channels stayed the same. The nature of the social system
Proposition 7:
was replaced by the social system for the same reasons mentioned at innovation.
Specifically these variables were chosen as they are part of every diffusion process. The most important element among those three is that of the
innovation itself. In this research that of management innovation as that is the focal point of interest in this research.
The theoretical model (depicted in figure 4-1) works as follows. On the left side of the model the elements determining the extent of adoption are depicted. These elements influence the diffusion and adoption process in their own way, which is visualised in the box in the middle.
Together these elements should give a clear and objective analysis of the performance management system of X. Based on that analysis a conclusion will be formulated along with recommendations.
DIFFUSION AND ADOPTION
PROCESS The social system
- National Culture - Organisational culture Communication channels - Mass media - Interpersonal
Figure 4-1: Theoretical model (Adapted from Rogers, 1995)
4.4 Concluding remarks
This chapter discussed the concept of diffusion. The process of diffusion is an important part in the innovation process, without it an innovation often fails to realize its investment (Rogers, 1995).
Starting with defining the concept of diffusion most attention was given to the variables that influence the extent of diffusion; innovation, communication channels and the social system where every element was dealt with in great detail.
This chapter also showed that diffusion is a special kind of communication. Therefore in order to have a smooth and proper diffusion process this is a very important part. Most of the parts discussed in this chapter had the words
perceived in them. Meaning that employees and managers adopt an
innovation not only based on rationality but also on the way they perceive it. With this chapter also the literature review comes to an end. During this literature review the concepts of innovation and diffusion where explored. The purpose of this literature review was to clarify these concepts and to explain their interdependence. Furthermore it showed that there are a lot of
5 METHODOLOGY
Introduction
This chapter will discuss the methodology used in this research. Paragraph 5.1 will explain the type of research used and why this type was chosen. The next paragraph, 5.2, will continue discussing the research population from which the primary data was derived. Paragraph 5.3 will give an overview of the used data collection methods of this research. Finally paragraph 5.4 will add some final conclusions.
5.1 Type of research
Setting up the research process depends on the purpose of the investigation; there are several strategies for doing this. The literature of Yin (1993, 1994) is well known for describing these research processes. Yin extensively describes the different strategies from which can be chosen when conducting research. In general, five research strategies can be distinguished: survey, experiment, archival analysis, history and case study.
To find the enhancers and inhibiters of diffusion of performance management at X the best research strategy in this case was thought the nested single case study (use of one singular case study company). Which meant studying and comparing 6 different subsidiaries; The Netherlands, Germany, China, Singapore, North-America and Brazil on the extent of diffusion within these different subsidiaries for X only, hence single case, where the remark has to be made that most data from other subsidiaries was compared to The Netherlands (see figure 5-1). The lines between The Netherlands and other participating countries with subsidiaries represent the comparisons between the Dutch situation and the foreign situation. The dotted lines refer to the comparisons among the subsidiaries; these were only mentioned in the analysis when differences were very clearly visible. A case study refers to the collection and presentation of detailed information about a particular
participant or small group, frequently including the accounts of subjects
themselves. As a form of qualitative descriptive research, the case study looks intensely at an individual or small participant pool, drawing conclusions only about that participant group and in that specific context. A case study is a method of direct observation in which the relationship between theory and real context can be formed. The case analysis needs to create insight in a variety of information, (unstructured) facts, opinions, data and incidents. As in a practical situation, a case analysis also works within the limitations inherent to evidence and concludes with consistent interpretations. The main advantage of the case study is the practical case which can directly be analysed and related to the underlying theories; the observed results of the case study can directly be read and serve thus as a direct and simple method. The research method also gives the flexibility for doing research, with room for the
5.2 Population
The population is the limitation of the research variables you want to use in your research (Baarda en de Goede, 1999). Looking at the formulated problem statement the population in this case study are the employees of X. Where the remark has to be made that within X there has been made a distinction between white collar (office employees) and blue collar workers (factory workers); the latter were excluded from participating in this research as they have no experience with the current performance management system. All participants were selected randomly and on availability during my six month internship. In order to give an accurate and reliable image
managers and employees were selected from countries participating in this research; The Netherlands, Germany, China, Singapore, North-America and Brazil. Specifically these countries were selected as these all occupy different positions on the cultural difference scale of Hofstede. As these countries are culturally different this is also reflected in their organisational culture. This might influence the diffusion process of the performance management system.
Figure 5-1: Participating countries
