1. Introduction
In particularly dynamic economic contexts such as the IT industry, the challenges that companies have to face when developing and assuring the highest level of individual performance are even more crucial. On the one hand, research and studies have already highlighted the existence of a multitude of factors acting at different levels and hierarchies that can influence the performance of an organization. On the other hand, literature pays less attention to how performance factors in small and medium enterprises compared to large organizations. While it is on one side reasonable to expect that, in various contexts, the literature focuses on large organizations where the majority of the workforce resides, SMEs embody a critical venue of highly innovative environments and, despite their dimensions, they hold the potential to strategically adapt and rapidly change their trajectory to directions that are unusual for big companies. Given that they have performance challenges since the overwhelming number of SMEs operating in the British software industry have between 50 and 249 employees, a research project investigating the performance of individuals working in this kind of environment is both relevant and potentially valuable to the existing body of knowledge. Also, the term “performance” can assume different meanings depending on the focus and the subject area that the study addresses such as the net income of a company or the quality and quantity of the goods that are produced. However, since the main interest of this study is about individual performance for daily operations, in this research, the measurement for performance deliberates around the efficiency and the effectiveness of an employee concerning his target and his actual work, to reflect critiques or other desired dimensions. So by the aim dictated by the title and the potential meanings of “performance”, we are interested in understanding what could be the main factors that could affect and potentially shape an employee’s daily experience given different circumstances and time in the completion of the tasks. By identifying, if so, what the key drivers for a successful performance are, both human resources managers and professionals could derive benefits from suggestions and recommendations and possibly tools that the analysis can provide. Last but not least, the chance to focus on whether the same driver has different importance under various work scenarios is a rare opportunity to gain a deep understanding of the human resources dynamics in the software industry. By looking at the problem from many different angles, the applicability and usefulness of our theories and results are expected to be enhanced. We believe that the results of our analysis have the potential to create a significant step in not only understanding how to improve the single individual performance but also how to implement a strategy to align and optimize the overall organization’s success.
1.1. Background
One of the definitions of performance was developed by Campbell (1990), who listed eight determinants of it. Friedman and Lang (1989) classify the determinants mainly focusing on behavior and thus can be classified into three areas – declarative, conditional, and execution. Executable knowledge has become a new source of competitive advantage or even the dominant competition for today’s corporations (Zack, 1999). Almost all organizations are facing increasingly turbulent business environments (Davenport and Prusak, 1998). For example, shorter business cycles, greater product diversification, and more demanding customers. To survive such relentless competition, organizations need to be in a position to improve the efficiency and effectiveness of all knowledge processes. With the increasingly critical role of knowledge and technology, investment in knowledge management and information technology (IT) has taken up a significant portion of the total resources in organizations nowadays (Alavi and Leidner, 2001). Some studies have investigated the ‘old economy’ business and the new ‘net-based’ operations and have concluded that the former might not be able to survive and succeed without transforming into a new ‘knowledge intensity’ business (Wiig, 1997). It is reported that though the majority of Western organizations are implementing some kind of knowledge management programs, the problem is that most of them have not yet tapped the full advantages of knowledge and technology for better organizational performance and continuous improvement (Booz-Allen and Hamilton, 1998). From these studies, it can be concluded: that the realization and potential of knowledge are crucial to success; tremendous time, effort, and money have been put into linking the technology, the people, and the process in both academic research and industrial practices; and the role of knowledge and technology in improving organizational performance has been widely recognized and investigated. On the other hand, as also pointed out by some researchers, only a few researchers have been trying to investigate objective and analytic data-driven research in the knowledge management field (Baker, 2000). Nickols (2000) added that few works have proposed a ‘validated model’ for knowledge management. He claimed that most of the published articles are too ‘abstract and unfounded’ to serve as guidance for setting up a knowledge management platform. It seems that the research in the knowledge management area lacks a comprehensive, analytic, and empirically tested framework that is capable of assisting managers in addressing a wide range of problems. He urged that more objective research needs to be carried out on the relationship between knowledge, business process, and organizational performance for more ‘systematic and informed’ managerial decision-making. This comment echoed the conclusion made by Wiig (1997) that many of the knowledge-related activities are not being done ‘properly and intelligently’. He suggested that senior management should lead the initiative and stressed that a strategic approach to knowledge management must include technology, organizational, work process coordination, and continuous improvement. These comments reveal that there is a strong research need for providing empirical evidence to support the theoretical frameworks and propositions found in the literature. Our research intends to address this need and develop an objective and analytically validated framework for understanding the determinants of individual performance in the small and medium enterprise (SME) sector, particularly in the domain of the British software industry. It will be shown later that the knowledge management approach proposed by this research is a result of the knowledge derived from the literature, the practitioners’ experiences, and a 2120-person industry-wide survey as well as empirical tests on our propositional framework.
1.2. Purpose of the Study
The purpose of this research is to give an overview of the current performance management practices. Also, through examinations in multiple areas (different types of research methods, different aspects of organizational societies and culture, which will be explained in later chapters), this paper will give an in-depth understanding and clearer picture of what are the main factors that drive individual performance. The third objective is to provide an analysis of how environmental changes will affect the performance of individuals within organizations and provide a few supports or solutions to the identified deficiencies. This research will specifically focus on British Software SMEs. The decision to select this area was based on a couple of points. First, as observed from previous studies, the infrastructure of Information Technology is growing at an amazing rate in Britain, and the investments in IT in different business sectors keep increasing from year to year. In terms of the output of the entire IT industry, the majority comes from the Software and Services sector. Secondly, the performance of Software SMEs in Britain will be an interesting topic to discuss because more and more attention has been given to SMEs both from the government and the academic society. Help and support have been implemented in the last few years aiming to drive up the performance of UK SMEs so that they can compete with international counterparts and contribute more to the growth of the country’s economy. On the other hand, there is relatively less academic research focusing on SMEs. Most of the attention has been gathered in studying larger organizations because they have more quantifiable data that can be used by academics. By studying performance management in Software SMEs, this paper will be able to provide some focused results that may not be seen in larger organizations, as it is known that SMEs usually lack resources and many of the routines are conducted by individuals. It is hoped that the findings and proposals from this research can be a solid base for different performance management initiatives and help not only Software SMEs in Britain but also similar organizations in different sectors as well. Lastly, as personal and academic development is concerned, undertaking such comprehensive research.
1.3. Research Questions
If any so far conducted research used or intends to use the same approach or the findings contradict this study’s findings, then that can be listed as another research gap. These research questions and objectives are a consolidation of performance measurement literature in SMEs and academic theories. The research questions consist of understanding how individual factors could have an impact on the performance of British software SMEs more than ever before. As well as whether the newly found knowledge of market orientation through performance measurement will escalate and be practiced in the industry. Also, what is the market orientation level in the studied SMEs, and each of the dimensions will be validated and verified? And finally, there are multi-collinearities among some of the factors in the research conceptual framework.
On the other hand, the study is expected to add to the literature on market orientation in technology-driven, dynamic, and competitive environments for the first time in this context; both the impact of an individual’s behavior and an organization’s behavior on performance indicators are to be tested. However, by taking a specific industry and specific economy and as well by focusing on multiple dimensions of market orientation, it is expected that the findings of the study will contribute to both scholars and software developers sector, in terms of fueling ongoing academic debate and in terms of guiding practitioner work. Also on customizing and locally adapting marketing technologies and as well, continuously improving marketing and market-oriented systems.
As we can see, this is a mixture of policy and academic theory-related questions. This multiple-case approach is expected to generate new knowledge and much-needed deeper insights on the topical issue of performance in British software SMEs. The use of the website visited or search results algorithm position as the performance measure has it’s testing in literature as well. Also, researchers who have been looking into the relationship between the use of marketing information with decision-making processes will have their expectations met by the testing.
The research questions for this study will be: – What individual factors have an impact on performance in British software SMEs? – What organizational factors have an impact on performance in British software SMEs?