Research Notes on the Best British Companies: a Peer Evaluation of Britain's Leading Firms
| Date | 01 December 1992 |
| Author | John Saunders,Michael Brown,Stuart Laverick |
| Published date | 01 December 1992 |
| DOI | http://doi.org/10.1111/j.1467-8551.1992.tb00044.x |
British Journal
of
Management,
Vol.
3,
181-195
(1992)
Research Notes on the Best British Companies: a
Peer Evaluation
of
Britain’s Leading Firms
John Saunders,* Michael Brown? and Stuart Laverick$
*National Westminster Bank Professor
of
Marketing, Loughborough University Business School
t
Senior Lecturer, Nottingham Polytechnic
t
Senior Lecturer, Derbyshire College of Higher Education
SUMMARY
The assessment of company performance is one of the major dilemmas facing the stra-
tegic researcher. This paper reviews the alternative methods available, then uses one
approach, peer assessment, to produce a guide
to
British company performance. Britain’s
best companies are identified and their profiles are examined. Their declared financial
strengths and relative weaknesses in marketing and innovation are identified.
Introduction
The question
‘
Who
S
Excellent
Now?’
(Business
Week,
1984) shows one of the frustrations of stra-
tegic research. Two years after the publication of
‘In
Search
of
Excellence’,
17 of the companies cited
by Peters and Waterman (1982) had fallen from
grace: four because of financial difficulties, 10
because of significant decline in earnings resulting
from serious business andlor management prob-
lems and three that had been humbled by manage-
ment blunders. More recent studies in America
comparing Peters and Waterman’s excellent com-
panies with other samples provide little evidence
that these firms outperform others and some evi-
dence that they are worse than average performers
(Johnson
et
at.,
1985; Aupplerle
et
al.,
1985; Chak-
ravarthy, 1986). In Britain, recent events have
shown how difficult it is to identify Britain’s excel-
lent companies. Many of the companies that did
well in the late 1980s have stumbled or failed. At
a less dramatic level, an analysis
of
Britain’s top
performing companies on the basis
of
sales and
profit and growth, published annually by
Manage-
ment
Today, shows that few of the top performers
appear anywhere near the top 10 years hence.
Although central to strategic research, the identifi-
cation of the top companies to be admired
is
clearly
problematical. The validity of Peters and Water-
man’s view of excellence has been examined by a
number of researchers in America (Sharma
et
al.,
1990) and the United Kingdom (Saunders and
Wong, 1985). Several conclusions can be drawn
from these studies.
What und who
is
excellent?
Studies have compared
the excellent firms identified by Peters and Water-
man (1982) with financial and economic criteria.
The general conclusion is that not all those orig-
inally promoted as excellent performed that way
when measured against a number
of
financial ratios
(Business Week,
1984). It is also inevitable that even
excellent firms sometimes underperform (Ramanu-
jam and Venkatraman, 1988), and that Peters and
Waterman’s principles and practices are only part
of
what
is
necessary for a firm to become a consis-
tently high performer (Barney, 1986).
Degrees
of
Excellence.
The approach taken by
Peters and Waterman (1982) suggests that firms are
either excellent or not excellent. It would be more
realistic to see excellence as the extreme of
a
conti-
nuum (Sharma
et al.,
1990).
Scaling Excellence.
There has been little attempt
to develop and validate scales that reliably measure
the attributes of excellence. Most studies have
looked at one dimension and others
(e.g.,
Hitt and
1045-3
172/92/04018 1-1 5$12.50
0
1992
by
John Wiley &Sons,
Ltd.
Received
26
June 1991
Revised
6
March
1992
To continue reading
Request your trial