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Organizational success and failure:: an empirical test of a holistic model

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  • Flamholtz, Eric G.
  • Aksehirli, Zeynep

Abstract

This paper provides an empirical test of a holistic model of organizational success. It builds upon previous work by Flamholtz (Flamholz, 1995) Managing organizational transitions: implications for corporate and human resource management, European Management Journal 13(1), 39-51.] to develop a model of organizational success and failure. The initial model proposes that there are six key factors or 'strategic building blocks' of successful organizations, and the six key variables must be designed as a holistic system, which has been termed 'The Pyramid of Organizational Development'. The current paper proposes a link between the organizational development model and the financial success of organizations. To test this hypothesized relationship, we have analyzed financial and non-financial information relevant to the hypothesized model for eight pairs of companies in different industries. Each company was evaluated in terms of the six key strategic building blocks, and scores were assigned to indicate the degree of the organization's development. This organizational development score and measures of financial performance were used in a Friedman two-way analysis of variance as well as in a regression analysis to test the predictive validity of the framework. The results of both the Friedman and regression analysis suggest that there is a statistically significant relationship between the development of the six critical success factors and overall financial success of organizations. This has significant implications for both management theory and practice.

Suggested Citation

  • Flamholtz, Eric G. & Aksehirli, Zeynep, 2000. "Organizational success and failure:: an empirical test of a holistic model," European Management Journal, Elsevier, vol. 18(5), pages 488-498, October.
    • Handle: RePEc:eee:eurman:v:18:y:2000:i:5:p:488-498
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    Citations

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    Cited by:

    1. Yeongjun Yeo & Chansoo Park, 2018. "Managing Growing Pains for the Sustainable Growth of Organizations: Evidence from the Growth Pathways and Strategic Choices of Korean Firms," Sustainability, MDPI, vol. 10(10), pages 1-24, October.
    2. Harkonen, Janne & Haapasalo, Harri & Hanninen, Kai, 2015. "Productisation: A review and research agenda," International Journal of Production Economics, Elsevier, vol. 164(C), pages 65-82.
    3. Durst, Susanne & Hinteregger, Christoph & Zieba, Malgorzata, 2019. "The linkage between knowledge risk management and organizational performance," Journal of Business Research, Elsevier, vol. 105(C), pages 1-10.
    4. Urban Pauli, 2015. "In What To Invest After Surviving – The Investment Structure of Growing SMEs," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 11(4), pages 93-114.
    5. Steven H. Seggie & Emre Soyer & Koen H. Pauwels, 2017. "Combining big data and lean startup methods for business model evolution," AMS Review, Springer;Academy of Marketing Science, vol. 7(3), pages 154-169, December.
    6. Joseph Paradi & Sandra Vela & Haiyan Zhu, 2010. "Adjusting for cultural differences, a new DEA model applied to a merged bank," Journal of Productivity Analysis, Springer, vol. 33(2), pages 109-123, April.
    7. Janne Harkonen & Harri Haapasalo & Kai Hanninen, 2013. "Productisation: A Literature Review," Diversity, Technology, and Innovation for Operational Competitiveness: Proceedings of the 2013 International Conference on Technology Innovation and Industrial Management,, ToKnowPress.
    8. Bumbescu Sorina Simona, 2020. "Analysis of Economic Performance in Agriculture Using Econometric Modeling," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 30(3), pages 118-128, September.
    9. Sudhir Rana, 2021. "Creating ‘PROP’ to Achieve Organizational Success: A Future Research Agenda," FIIB Business Review, , vol. 10(1), pages 1-4, March.
    10. Panayiotis Curtis & Theodore A. Roupas, 2009. "Health Care Finance, the Performance of Public Hospitals and Financial Statement Analysis," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 199-212.
    11. Aki Aapaoja & Jaakko Kujala & Lasse TT Pesonen, 2012. "Productization of University Services," International Journal of Synergy and Research, ToKnowPress, vol. 1(1), pages 89-106.

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