QUESTION 3 (20) What makes one organisation more successful than another? Scholars of the firm have long concerned themselves with the search for the differential characteristics that affect performance of organisations. In today's competitive landscape, existing theories of competitive advantage appear inadequate. They overemphasize executives' ability to analyse and predict which industries, competencies, or strategic positions will create long-term viability, and underemphasize the complexity of competitive advantage. Mr Daniel Netshiolongwe, the group operations director of a large conglomerate, Octomerate Ltd, has hypothesized that a construct which he has termed managerial ecosystem is a significant predictor of organisational performance. He suspects that an expert knowledge of the dynamics of managerial ecosystem and its determinants could potentially constitute a competitive advantage for Octomerate Ltd. Mr Netshiolongwe has requested your help with an investigation meant to unravel the ambiguities around managerial ecosystem and its association with organisational performance. AL) STAGE 1 As part of the effort to reduce the confusion about the drivers of organisational performance as well as to demystify the role top management teams play in fostering a culture of superior performance within organisations, you have embarked on an extensive review of the extant literature encompassing the Resource- Based View (Grant, 1991; Barney, 1991), Social Capital perspective (Gabbay & Leenders, 1999) and Decision- based View (Elsenhardt, 1999) of competitive advantage. 67 your foray into the extant management literature and appraisal of the attributes of successful managers has unearthed inter alia three main dimensions of a firm's managerial ecosystem namely, human capital social capital and decisional capital of managers. You subscribe to the "competing on the edge" perspective art competitive advantage wherein an evolving ecosystem allows a firm to create a continuing flow of temporary and shifting competitive advantages. You have proposed a predictive model linking the managerial attributes, managerial capital and organisational performance (see Figure 3.1, below). Human Capital Social Capital Managerial ecosystem Organisational Performance Decisional Capital Figure 3.1: A predictive model of managerial ecosystem explanation of organisational performance. You have decided to conduct a confirmatory factor analysis (CFA) of the three managerial attributes as antecedence of managerial ecosystem. Having validated the survey questionnaire using pilot data from 10 respondents, you distributed 250 self-administered questionnaires to senior and middle level managers at Octomerate Ltd on a random basis. The questionnaire was structured to measure the three identified factors, managerial ecosystem and organisational performance. 200 valid responses were collected. Regression and structural equation modelling were used to assess the relationship among variables. Required: 3.1 Elaborate on the research paradigm and research design of Mr Netshiolongwe's study. (3) 3.2 Identify and comment meaningfully on the methodology of Mr Netshiolongwe's study. (4) MANCOSA: MBA (GENE 3.3 The output of the data analysis of Mr Netshiolongwe's study is depicted below in Tables I to Table I: Reliability analysis Cronbach's Alpha 0.868 Construct Number 1 2 3 4 5 Construct Human capital (HC) Social capital (SC) Decisional capital (DC) Managerial ecosystem (ME) Overall reliability 0.948 0.907 0.832 0.902 Table II: Descriptive Statistics Descriptive Statistics Mean Std. Deviation Organisational performance 6.510 .81438 Managerial ecosystem 6.755 75894 Human capital 7.240 .86959 Social capital 7.259 .85591 Decisional capital 7.430 83893 N 200 200 200 200 200 Table III: Regression Model Summary - Managerial ecosystem Model Model Summary R R Square Adjusted R Square Std. Error of the Estimate .7540 .569 547 0.699 a. Predictors: (Constant), Human capital, Social_capital, Decisional capital b. Dependent Variable: Managerial_ecosystem Table IV: Results of ANOVA for Managerial ecosystem model ANOVA Sum of Model Squares df Mean Square 1 Regression 61.607 3 20.536 Residual 46.713 196 .238 Total 108.320 199 a. Dependent Variable: Managerial ecosystem b. Predictors: (Constant), Human_capital, Social_capital, Decisional capital F 86.166 Sig .000 Table V: Regression coefficients for Managerial ecosystem Model Standardized Coefficients Beta Coefficients Unstandardized Coefficients B Std. Error .733 437 324 . 108 .548 .118 .276 1 (Constant) Human capital Social_capital Decisional capital Dependent Variable: Managerial_ecosystem 077 .123 .028 2.656 5.675 3.000 4.654 Sig 009 .000 .000 .000 .522 Table Vi: Regression model summary - Organisational performance Model Model Summary R R Square Adjusted R Square Std. Error of the Estimate 1778 .605 .594 .396 a Predictors: (Constant). Managerial_ecosystem b. Dependent Variable: Organisational performance Table VII: Results of ANOVA for Organisational performance model Model Mean Square ANOVA Sum of Squares df Regression 71.471 1 Residual 46.656 198 Total 118.127 199 a. Dependent Variable: Organisational performance b. Predictors: (Constant), Managerial_ecosystem 71.471 0.236 F 303.311 Sig .000 Table VIII: Regression coefficients for Organisational performance model Coefficientsa Unstandardized Coefficients B Std. Error 4.387 1.062 2.576 .834 Standardized Coefficients Beta Model 1 (Constant) Managerial_ecosystem a. Dependent Variable: Organisational performance t 4.131 3.089 Sig .000 .000 .754 Required: 3.3.1 State the statistical test whose output is depicted in Table I, interpret the output in Table I and highlight the significance of the output for the findings of the study? (3) 3.3.2 Interpret the output in Table III to Table V, using the standard reporting format. What is the outcome of the confirmatory factor analysis? Comment on the goodness of fit of the model. (5) 3.3.3 On the basis of the output in Table VI to Table VIII, comment on the impact of Managerial ecosystem on Organisational performance at Octomerate Ltd. (4) 3.3.4 Denoting the constructs 'Managerial ecosystem by x and Organisational performance' by y, state an appropriate linear regression equation linking 'Managerial ecosystem' to 'Organisational performance' at Octomerate Ltd. (1) QUESTION 3 (20) What makes one organisation more successful than another? Scholars of the firm have long concerned themselves with the search for the differential characteristics that affect performance of organisations. In today's competitive landscape, existing theories of competitive advantage appear inadequate. They overemphasize executives' ability to analyse and predict which industries, competencies, or strategic positions will create long-term viability, and underemphasize the complexity of competitive advantage. Mr Daniel Netshiolongwe, the group operations director of a large conglomerate, Octomerate Ltd, has hypothesized that a construct which he has termed managerial ecosystem is a significant predictor of organisational performance. He suspects that an expert knowledge of the dynamics of managerial ecosystem and its determinants could potentially constitute a competitive advantage for Octomerate Ltd. Mr Netshiolongwe has requested your help with an investigation meant to unravel the ambiguities around managerial ecosystem and its association with organisational performance. AL) STAGE 1 As part of the effort to reduce the confusion about the drivers of organisational performance as well as to demystify the role top management teams play in fostering a culture of superior performance within organisations, you have embarked on an extensive review of the extant literature encompassing the Resource- Based View (Grant, 1991; Barney, 1991), Social Capital perspective (Gabbay & Leenders, 1999) and Decision- based View (Elsenhardt, 1999) of competitive advantage. 67 your foray into the extant management literature and appraisal of the attributes of successful managers has unearthed inter alia three main dimensions of a firm's managerial ecosystem namely, human capital social capital and decisional capital of managers. You subscribe to the "competing on the edge" perspective art competitive advantage wherein an evolving ecosystem allows a firm to create a continuing flow of temporary and shifting competitive advantages. You have proposed a predictive model linking the managerial attributes, managerial capital and organisational performance (see Figure 3.1, below). Human Capital Social Capital Managerial ecosystem Organisational Performance Decisional Capital Figure 3.1: A predictive model of managerial ecosystem explanation of organisational performance. You have decided to conduct a confirmatory factor analysis (CFA) of the three managerial attributes as antecedence of managerial ecosystem. Having validated the survey questionnaire using pilot data from 10 respondents, you distributed 250 self-administered questionnaires to senior and middle level managers at Octomerate Ltd on a random basis. The questionnaire was structured to measure the three identified factors, managerial ecosystem and organisational performance. 200 valid responses were collected. Regression and structural equation modelling were used to assess the relationship among variables. Required: 3.1 Elaborate on the research paradigm and research design of Mr Netshiolongwe's study. (3) 3.2 Identify and comment meaningfully on the methodology of Mr Netshiolongwe's study. (4) MANCOSA: MBA (GENE 3.3 The output of the data analysis of Mr Netshiolongwe's study is depicted below in Tables I to Table I: Reliability analysis Cronbach's Alpha 0.868 Construct Number 1 2 3 4 5 Construct Human capital (HC) Social capital (SC) Decisional capital (DC) Managerial ecosystem (ME) Overall reliability 0.948 0.907 0.832 0.902 Table II: Descriptive Statistics Descriptive Statistics Mean Std. Deviation Organisational performance 6.510 .81438 Managerial ecosystem 6.755 75894 Human capital 7.240 .86959 Social capital 7.259 .85591 Decisional capital 7.430 83893 N 200 200 200 200 200 Table III: Regression Model Summary - Managerial ecosystem Model Model Summary R R Square Adjusted R Square Std. Error of the Estimate .7540 .569 547 0.699 a. Predictors: (Constant), Human capital, Social_capital, Decisional capital b. Dependent Variable: Managerial_ecosystem Table IV: Results of ANOVA for Managerial ecosystem model ANOVA Sum of Model Squares df Mean Square 1 Regression 61.607 3 20.536 Residual 46.713 196 .238 Total 108.320 199 a. Dependent Variable: Managerial ecosystem b. Predictors: (Constant), Human_capital, Social_capital, Decisional capital F 86.166 Sig .000 Table V: Regression coefficients for Managerial ecosystem Model Standardized Coefficients Beta Coefficients Unstandardized Coefficients B Std. Error .733 437 324 . 108 .548 .118 .276 1 (Constant) Human capital Social_capital Decisional capital Dependent Variable: Managerial_ecosystem 077 .123 .028 2.656 5.675 3.000 4.654 Sig 009 .000 .000 .000 .522 Table Vi: Regression model summary - Organisational performance Model Model Summary R R Square Adjusted R Square Std. Error of the Estimate 1778 .605 .594 .396 a Predictors: (Constant). Managerial_ecosystem b. Dependent Variable: Organisational performance Table VII: Results of ANOVA for Organisational performance model Model Mean Square ANOVA Sum of Squares df Regression 71.471 1 Residual 46.656 198 Total 118.127 199 a. Dependent Variable: Organisational performance b. Predictors: (Constant), Managerial_ecosystem 71.471 0.236 F 303.311 Sig .000 Table VIII: Regression coefficients for Organisational performance model Coefficientsa Unstandardized Coefficients B Std. Error 4.387 1.062 2.576 .834 Standardized Coefficients Beta Model 1 (Constant) Managerial_ecosystem a. Dependent Variable: Organisational performance t 4.131 3.089 Sig .000 .000 .754 Required: 3.3.1 State the statistical test whose output is depicted in Table I, interpret the output in Table I and highlight the significance of the output for the findings of the study? (3) 3.3.2 Interpret the output in Table III to Table V, using the standard reporting format. What is the outcome of the confirmatory factor analysis? Comment on the goodness of fit of the model. (5) 3.3.3 On the basis of the output in Table VI to Table VIII, comment on the impact of Managerial ecosystem on Organisational performance at Octomerate Ltd. (4) 3.3.4 Denoting the constructs 'Managerial ecosystem by x and Organisational performance' by y, state an appropriate linear regression equation linking 'Managerial ecosystem' to 'Organisational performance' at Octomerate Ltd. (1)