Previously published as: Work Study
Online from: 2004
Subject Area: Performance Management and Measurement
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|Title:||The UK productivity gap in the service sector: do management practices matter?|
|Author(s):||Giuliana Battisti, (Industrial Economics Division, Nottingham University Business School, Nottingham, UK>), Alfonsina Iona, (OIM Group, Aston Business School, Birmingham, UK)|
|Citation:||Giuliana Battisti, Alfonsina Iona, (2009) "The UK productivity gap in the service sector: do management practices matter?", International Journal of Productivity and Performance Management, Vol. 58 Iss: 8, pp.727 - 747|
|Keywords:||Employee productivity, Performance management, United Kingdom|
|Article type:||Literature review|
|DOI:||10.1108/17410400911000381 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
|Acknowledgements:||This paper is part of a research program on “The role of management practices in closing the UK productivity GAP”, supported by a grant from the EPSRC-AIM (EP/D503965/1). The authors would like to thank the partners on this project for their useful comments on earlier versions of the paper. Of course any errors and omissions remain the responsibility of the authors alone.|
Purpose – This paper aims to contribute to the debate on the drivers of the productivity gap that exists between the UK and its major international competitors.
Design/methodology/approach – From the macro perspective the paper explores the quantitative evidence on the productivity differentials and how they are measured. From the micro perspective, the article explores the quantitative evidence on the role of management practices claimed to be a key determinant in promoting firm competitiveness and in bridging the UK gap.
Findings – This study suggests that management practices are an ambiguous driver of firm productivity and higher firm performance. On the methodological side, qualitative and subjective measures of either management practices or firm performance are often used. This makes the results not comparable across studies, across firms or even within firms over time. Productivity and profitability are often and erroneously interchangeably used while productivity is only one element of firm performance. On the other hand, management practices are multi-dimensional constructs that generally do not demonstrate a straightforward relationship with productivity variables. To assume that they are the only driver of higher productivity may be misleading. Moreover, there is evidence of an inverse causal relationship between management practices and firm performance. This calls into question most empirical results of the extant literature based on the unidirectional assumption of direct causality between management practices and firm performance.
Research limitations/implications – These and other issues suggest that more research is needed to deepen the understanding of the UK productivity gap and more quantitative evidence should be provided on the way in which management practices contribute to the UK competitiveness. Their impact is not easily measurable due to their complexity and their complementary nature and this is a fertile ground for further research.
Originality/value – This paper brings together the evidence on the UK productivity gap and its main drivers, provided by the economics, management and performance measurement literature. This issue scores very highly in the agenda of policy makers and academics and has important implications for practitioners interested in evaluating the impact of managerial best practices.
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