Towards excellence in public administration: organisation theory-based performance management model

A study of the balancing of lean thinking and stakeholder salience in decision-making

Purpose

This research brings together two streams of thought applied to decision-making: lean thinking and stakeholder theory. Both have been identified as ways to improve organizational value. Previous studies disagree regarding whether they can work together. This study investigates if managers balance stakeholders and lean thinking in decision-making.

Design/methodology/approach

This research investigates if both lean thinking and stakeholder salience share common literature by using data mining. It surveys organizations that perceive themselves as lean and have multiple diverse stakeholders to determine whether waste and salience are considered when making decisions. An ANOVA is done to see if organization type, management level, organization size, geographic location, or lean maturity has an effect on the priority of stakeholder salience or lean thinking's waste variants when making decisions.

Findings

Findings of this research are: 1) stakeholders salience criteria are considered more often than lean thinking's waste variants in decision-making by managers as a whole and in particular by middle-level managers and senior managers. However, lean thinking's waste variants are considered as often as stakeholder salience criteria by first-line managers. 2) The ranking of stakeholder salience in making decisions is not affected by organization type, respondent position, organization size, perceived lean experience, or geographic location. The organization type, organization size, lean experience, and location do not affect the ranking of lean thinking variants either. But the ranking of lean thinking's waste variants is significantly different for first-line, middle-level, and senior managers. Middle-level managers rank lean thinking higher than that of either first-line or senior-level. Because of this, middle managers have a more balanced approach in using lean thinking and stakeholder salience than other managers. 3) Stakeholder salience criteria have a significantly higher ranking than lean thinking variants in making decisions for all organization types: manufacturing and nonmanufacturing.

Originality/Value

This research demonstrates a significant disconnect exists between lean thinking and demands of stakeholders that impacts the value of an organization, and only middle-level managers bring balance and awareness of both streams of thought. An empirical instrument has been developed to balance the stakeholder salience criteria with the lean thinking variants.