Performance implications for the relationships among top management leadership, organizational culture, and appraisal practice: testing two theory-based models of organizational learning theory in Japan

1. An earlier version of this paper was presented at the 23rd European Group for Organizational Studies (EGOS) Colloquium held in Vienna on 5–7 July 2007. A part of this research was supported by the Grant-in-Aid for Scientific Research (B) sponsored by the Ministry of Education, Culture, Sports, and Technology (MEXT), Japan, which was awarded to the second author of this paper (No. 19730264).

Abstract

The purpose of this study was to examine the interrelationships among top management leadership, organizational culture and human resource (HR) practices, and their associative effects on organizational performance. Based on the theory of organizational learning, we developed and tested two different causal models: (1) a feed-forward learning flow model in which supportive leadership by top management would create a community culture and HR practices within organizations; and (2) a feedback learning flow model in which a community culture would support the practice of supportive leadership by top management and HR practices within a firm. Our structural equation modelling (SEM) results for a sample of 225 Japanese small and medium-sized enterprises (SMEs) in Japan supported the second model, in which the dominance of a community culture within the firm is an antecedent of top management's supportive leadership, which in turn necessitates a performance-based appraisal practice and eventually leads to better organizational performance in terms of objective indicators of turnover and absenteeism rates and workforce productivity. The findings are used to discuss the role of top management leadership in a particular organizational culture from the organizational learning perspective. Limitations and directions for future research are also discussed.

Keywords:

• HR practices; Japan; organizational culture; organizational learning; small and medium-sized enterprises (SMEs); top management leadership

Notes

1. An earlier version of this paper was presented at the 23rd European Group for Organizational Studies (EGOS) Colloquium held in Vienna on 5–7 July 2007. A part of this research was supported by the Grant-in-Aid for Scientific Research (B) sponsored by the Ministry of Education, Culture, Sports, and Technology (MEXT), Japan, which was awarded to the second author of this paper (No. 19730264).