Key management factors, contextual factors and business performance : an empirical investigation of their relationship

This study presents the outcome of an investigation of the relationship between key management factors, contextual factors and business performance, and also tests for differences in the management factors according to contextual factors. The results show that for the entire sample, innovation, vision and organisational culture were the key management factors significantly associated with overall business performance. It was also found that managers in the retail and service industries were more likely to emphasise the use of innovation, role models, vision and customer focus than their counterparts in the construction industry; larger firms were more likely to concentrate on innovation and role models; and firms which market their goods and services overseas were more likely to focus on innovation. When management factors were regressed on overall business performance according to contextual factors, vision was a common significant predictor for the manufacturing, retail and construction industries; while innovation was found to be a critical factor for the retail and service industries with creating change also being significant for the latter industry. The significant predictors of business performance for micro firms were vision and creating change; while for small firms innovation was the only key factor and for medium firms articulated vision and presence of a role model were key factors with the latter being negatively associated with performance. Innovation and vision were significant predictors for firms marketing their goods or services locally, while customer focus and innovation were key factors for those marketing goods or services state-wide and overseas respectively.