3.1Introduction

Nowadays the business environment requires from organizations constant improvements in order to stay competitive or increase competitiveness [1–3]. Within a framework of retaining or increasing competitive advantage, an important issue is the efficiency and productivity of organizational functioning, which represents the backbone of organizational competitive advantage [4–6].

The existence and development of (most) organizations depend on the attainment of suitable outcomes of productive work and behavior [7–10]. To attain desired results, the organization must satisfy at last two preconditions at its point of departure: it must appropriately use its available (given or potential) resources for the attainment of results, and it must attain results by meeting the demands and needs of its (internal and external) social, business, and natural environments [7, 10, 11]. The attainment of such results is far from simple in an organization, which is a complex and complicated entity in objective reality. An organization faces many challenges concerning the selection and application of suitable approaches, methods, methodologies, and techniques for attaining its goals [12–14].

Efficiency has been and is an important point of departure, objective factor, and outcome of working in (diverse) organizations. Efficiency refers to the ratio of output to input of any system [15–17]. Organizations in the current environment assure their efficiency and productivity by using suitable managerial concepts, techniques, and tools [18–25].

In recent decades a plethora of management tools have been developed that can support and improve organizational efficiency [26–29]. The most frequently used tools include, for example, lean production, business process reengineering, Six Sigma, and supply chain management and processes, as well as tools that enhance innovativeness such as collaborative innovation, in addition to customer or supplier relationship management [2, 30]. Studies in the literature discuss at length management tools, whereas the focus here is on the most widely known and used tools, like outsourcing, strategic planning, total quality management, lean production, and customer segmentation [31–33]. Those studies usually consider one, two, or several tools, while studies that consider the majority of the most frequently used tools are rare [34, 35] and deal mainly with explaining those tools and their pervasiveness. Management literature in Central and Eastern Europe, which focuses on issues about improving, optimizing, and developing businesses, is abundant [36–38], but the role and importance of management tools for business, especially their meaning for supporting and improving organizational efficiency, are very seldom considered. Few studies have outlined the link between the use of a certain tool and the benefits from using it [39].

To summarize, there is a significant lack of evidence on the use of management tools in various types of organizations, like production vs. service organizations, studies on the utilization of management tools in organizational departments, and the contribution of management tools to organizational productivity and efficiency. Thus, we have on the one hand a plethora of possible management tools for improving the efficiency of organizational work, but no clear link has been established between the utilization of management tools and their contribution to the efficiency of organizational work.

Based on the foregoing outlined starting points, this paper contributes to the existing literature at least in the following ways. The paper reveals the state of management tool utilization in production and service organizations as well as the utilization of management tools in various departments. Next the impact of management tool utilization on organizational improvements is empirically examined. A discussion section provides some examples of management tool utilization and discusses thoughts in the framework of the existing literature and findings. Finally, the paper offers suggestions on how organizations can enhance their efficiency and productivity through the utilization of currently underused management tools and exploit the rich potential that different tools offer for increasing efficiency and can contribute to the overall success of organizations.

Based on the aforementioned concepts, the chapter is organized as follows. In the literature review section, we outline key starting points for understanding efficiency and productivity, followed by a discussion of the role and importance of management tools for achieving efficiency. We conclude this section with some data about management tool utilization worldwide. Next, we outline key facts about our survey and results regarding management tool utilization among employees from various viewpoints. The discussion will address the current state of management tool utilization in organizations and employee self-assessment of the benefits of using management tools. A section on practical implications outlines suggestions about how to use management tools to increase efficiency. We conclude the paper by pointing out some limitations of this paper and future research directions.

3.2Theoretical background

Within the framework of the theoretical background, wewill first outline key concepts about efficiency and productivity, followed by an introduction of management tools and the role and importance of management tools in improving efficiency. At the end of this section a few paragraphs are dedicated to the utilization of management tools in various worldwide areas.

3.2.2Management tools

To use single management ideas, researchers have also developed and presented the following useful definitions and descriptions: (1) concept– as a rather comprehensive, developed, and defined basis for the consideration of an idea; (2) methodology – as an entity or closely related collection of methods, rules, and disciplinary postulates; (3) methods – as goal- and problem-ordered types of procedures; these are especially regular and systemic ways of setting and realizing goals; (4) techniques – as the manner in which technical details are treated; and (5) necessary tools (in the management literature some authors use the term instruments instead) [18–25].

A holistic consideration of management tools – as a possible (and selected) level of contemplation of management concepts – is presented in Figure 3.1.

A holistic comparison of several different management tools (e.g., their characteristics, preferences, weaknesses, usage, and possible results) is very complex and difficult [42–44]. In the literature, authors mention some dilemmas associated with making comparisons [20–22, 24, 45], and these authors give the following as examples of dilemmas: different comprehension and contextual understanding of tools, simultaneous usage of several tools, various sizes and use of tools on different levels or in different fields of organizations. Not all management tools can be compared; tools that were developed for different purposes, have different aims, or are mutually exclusive depending on the context are impossible to compare.

Management tools involve a set of concepts, processes, exercises, and analytical frameworks. This definition was coined by Rigby [34] and is based on his survey of management tools. Authors from the general management literature [12, 28, 44] and other management researchers use the term management tool [46, 47], but they do not clearly define it. Building on the aforementioned findings, a management tool may be defined as an instrument that can be use to support the implementation of concepts and ideas at all levels of conceptualization and realization of concepts, with the ultimate aim of supporting organizational processes.

Rigby and his peers proposed a typology of management tools, defining four groups of management tools. A typology is framed in a matrix, having two dimensions: (1) use of management tools and (2) percentage of satisfied users. This typology classifies management tools according to the mean values of use and satisfaction obtained in research [27, 34, 35]. Owing to the lack of comprehensive studies on management tools in the literature, there is no generally valid or content-related classification of management tools.

In searching for a content-related classification, known management tools can be organized into two groups based on a historical development of concepts, current use, and their potential for use. The first group encompasses traditional management tools that were developed in earlier management development phases. The majority of such tools are currently the most well-known and most widely used tools, like benchmarking, strategic planning, mission and vision statements, customer relationship management, outsourcing, the balanced scorecard, and customer segmentation [27, 34, 35]. The literature reveals that, globally, the most widely used tools aim at supporting customer satisfaction (e.g., customer relationship management, customer segmentation) [48, 49], followed by those supporting the long-term and clear future development of an organization (e.g., strategic planning, mission and vision statements) [47, 50, 51], supporting competitive comparison (e.g., benchmarking) [52, 53], and supporting optimization processes in an organization (outsourcing, core competencies, business process reengineering) [32, 54, 55]. There is also evidence showing a decreasing use of some traditional tools. For example, the popularity of business process reengineering has fallen in the last two decades owing to numerous unsuccessful reorganizations of business processes [35, 47, 56]. Also, total quality management, first treated as a potential source of sustainable competitive advantage [55], became less widely used when its use did not result in sustainable profitability [35, 47].

In the second group are contemporary tools. A brand new management concept or tool is rare since the majority of tools have their roots in earlier phases of management development [25]. This group encompasses tools whose evolution is largely based on either information technology development or supporting an existing management concept with information technology. This group also encompasses tools developed in later phases of management development. Furthermore, supporting existing management concepts with information technology results in a higher potential for this concept [25, 57]. Typical representatives of this group are, for example, shared service centers – aimed at a set of activities (e.g., human resource management activities) under one roof for selected organizational parts [58]. One of the latest tools is the corporate blog, whose serious use is a recent phenomenon [59]. Organizations use blogs for direct communication with their target population, information dissemination, or brand loyalty development, for example [59]. Further, radio frequency identification has become a widely used tool (especially in supply chains) since it enables acquiring data of any entity that can be psychically tagged and wirelessly scanned [60]. Also, relatively new are loyalty management and consumer ethnography [61]. For example, knowledge management takes on a whole new dimension when electronic databases are used to store knowledge and interfaces enable easier capture and dissemination of knowledge [57].

A detailed description of individual management tools is beyond the scope of our contribution. We will briefly describe some of the tools that will be outlined in the discussion and so will be briefly described in that section of the chapter.

3.3Research design and methodology

3.4Results

3.5Discussion

The main purpose of this chapter is to empirically examine the utilization of the most widely used management tools among employees in Slovenian production and service organizations and the benefits of commonly used management tools through the lenses of improving the productivity and efficiency of organizations. It is evident that production organizations are in the forefront of using management tools that aim to support processes optimization, like benchmarking, outsourcing, and total quality management. Service organizations have a very similar pattern of management tool utilization, with some differences, for example, at the base is the mission and vision statement. A focus on establishing a distinct mission and vision reveals findings about the importance of having a worthy mission in service organizations given the current business environment [63].

At the forefront in Slovenian production organizations are management tools that enable organizations to identify their core processes, since outsourcing, coupled with benchmarking, is intensively used. All the preceding ideas reflect the current situation in general, and especially in production organizations in Slovenia, where the key tendency in the last decade has been to focus on core business or core processes, outsource non-value-adding activity, and create a competitive advantage via benchmarking and identifying core competencies [2, 64–69]. The average use of management tools reveals the state of organizational transformation, which is ongoing in production organizations [38, 53, 86], since first and foremost are tools that support organizational optimization. Owing to the importance of optimization tools, those supporting customer relationships have not yet come to the fore [87, 88] and are less frequently used to support work in organizations. On the other hand, in well-developed economies, the most pervasive tools are those designed to strengthen customer relationships, reflecting the organization’s orientation toward customers, which is a key concern of organizations in the contemporary business environment [27, 89]. Tools for business process optimization moved to the background, where they still play a role in continuous improvements. From the perspective of service organizations, the pattern of management tool utilization is much more similar to Slovenian production organizations than to the pattern of management tool utilization in well-developed areas, where the most widely used tools are those for enhancing customer relationship management. What is more, it is also evident that in Slovenian service organizations, the level of management tool utilization is lower than in organizations, which again, leaves a lot of space for improvements, with the help of management tool utilization.

In terms of commonly used management tools by organizational department, some results were expected and some surprising. One surprising result was the higher utilization of mission and vision statements in departments where other tools might be preferred, like in fundamental process – Six Sigma, lean concept, reengineering, and total quality management [70–74]. The greater importance of mission and vision statements in fundamental processes certainly does not influence the lower utilization of other typical tools, but it is an indicator that organizations want all their employees to better understand the main organizational directions. Emphasizing the importance of mission and vision statements among employees in organizations has been an important task in the last decade in Slovenian organizations. In terms of expected results, in accounting and marketing, the most used tool is outsourcing. This reflects the current situation in organizations since a large proportion of organizations are small and do not have their own accounting and marketing departments but buy those service on the open market. The high utilization of benchmarking by upper managers indicates a need for comparison with other organizations and establishing best practices in order to improve the operations and performance of organizations.

Looking more closely, tools for supporting competitive comparisons (e.g., benchmarking), building core competencies, and outsourcing [32, 47, 52–54] are widely used by both production and service organizations. In terms of typical management tools aimed at enhancing productivity or the overall efficiency of processes in production organizations, like total quality management, Six Sigma, and lean operations [32, 54, 55], those tools are more commonly used in production than in service organizations, but their level of utilization is low. An exception is total quality management, while Six Sigma and lean operations are last in terms of utilization in organizations.

Regarding the differences in the utilization of management tools in departments in production and service organizations, we see that the utilization of knowledge management in production processes of production organizations is high, which indicates a strong emphasis on knowledge capture and dissemination in organizations in order to retain the knowledge in the organization and to support circulation of knowledge among employees in organizations [57, 75–78].

In terms of service organizations, mission and vision statements dominate, where again the focus is on making employees familiar with the mission and vision of the organization. For instance, a high level of utilization of customer relationship management by top management in organizations reflects the fact that the majority of organizations in Slovenia, as well as in our sample, are small, where the division between operational tasks and management tasks is not very strict. Business practice also supports this since managers in smaller organizations play a key role in customer care and customer relations management [2, 30].

In terms of organizational improvements, as a consequence of management tool utilization in organizations, the improvement of planning activities is the most frequently emphasized benefit in production and service organizations, in various departments. There may be several reasons for perceived improvements in planning by employees, for example, management tools enable recordkeeping, highlight historical trends and decisions, provide simulation techniques within tools for planning, and enable the development of different scenarios.

In terms of linking the performance/output/productivity or efficiency of processes and activities in organizations, the literature offers little comprehensive evidence about the utilization of different known management tools for optimization [5, 55, 56, 79], while reports about concrete results are very rare [62, 73, 80]. Production organizations commonly use tools in lean production, total quality management, or Six Sigma, but there are few practical researches that confirm the positive impact of using different management solutions in terms of production and efficiency improvements [72, 81]. For instance, a study that examined the impact of total quality management, with the mediating role of knowledge management, on business results showed that a combination of total quality management and knowledge management formed a cycle of improvement and development that led to organizational excellence [80]. Next, Six Sigma is a process-focused, statistically based approach to business and business process improvement that has focused primarily on improving the performance of manufacturing processes. Companies such as Motorola, Allied-Signal, and General Electric have used these tools to produce millions of dollars in bottom-line improvements [62, 82]. On the other hand, the results on the use of different management tools are often hidden in organizations and are treated as a trade secret. Industrial organizations commonly measure the effect of different tools in terms of their productivity or success in terms of financial measures, which is for internal organizational reporting purposes.

Based on our experience with business tools and referring to the several successful examples of using management tools to support process optimization, and along with it organizational productivity, it is evident that a key management tool is often lean manufacturing. This enables production organizationsto improve productivity, more closely monitor all process activities, and keep records and logs about production processes. In terms of results, production organizations point most commonly to increases in productivity, shortened production time, evidence about orders, and the traceability of activities.

3.6Practical implications

In terms of practical implications, our findings could be useful in various ways. Nowadays, newer management tools and those among service organizations’ most commonly used management tools have supersede traditional tools aimed at supporting productivity and efficiency, especially in production organizations. In the process of striving for intensive utilization of management tools to support the management of customers and suppliers, production organizations often find themselves in a situation where their focus is much more on efforts to sell their products instead of also on their core business – production. It is important to realize that both production and selling activities are crucial for today’s industrial organizations. Thus, an organization needs to have good products and know how to sell them. Other combinations are seldom successful or successful for only a short period of time.

For instance, lean operations and Six Sigma are traditionally associated with improvements in production organizations [62, 72]. In our case those tools are underused, and actions should be taken to intensively use them and take advantage of already proven management tools like lean production and Six Sigma for improving productivity and efficiency in production and service departments in organizations. Thus, the appropriate utilization of lean production could bring substantial benefits for companies since currently production organizations in Slovenia do not rely much on the two mentioned classic management tools, which significantly improve business processes, especially production processes. From the viewpoint of another traditional tool used in production organizations, total quality management, in order to increase the level of quality of processes in organization, it is important to strive for structured strategy with a view to furthering continuous improvement initiatives. For instance, Soare [83] suggests that an efficient and effective approach to business process management and optimization of processes should not be shortsighted or aimed at merely capturing elements from total quality management or reengineering. Ratherthe approach should reflect a holistic, balanced attitude toward continuous improvement, incorporating, for instance, elements from lean and Six Sigma, not just with regard to tools and methodology, but also the level of employee engagement or leadership involvement.

A commonsense and especially balanced approach is needed in organizations about (re)thinking the utilization of their current management tools to support organizational processes. Thus, ad hoc adoption of “typical management solutions” for production core process optimization (like total quality management, Six Sigma, lean production) and abandoning current widely used tools will not contribute to process optimization. Perhaps there can be some insight in optimization, but other problems can emerge, like losing business opportunities, owing to the shifting exclusive focus on new tools. These results can also cause organizations to rethink their utilization of management tools and carefully set priorities in order to fulfill customer needs for responsiveness and quality simultaneously [5, 84].

In terms of typical management tools, which are used primarily to support production processes, we can offer some practical advice for the utilization of management tools in service organizations. For instance, Six Sigma tools have been focused primarily on improving the performance of manufacturing processes. For instance, Bisgaard et al. [62] in his research emphasized that Six Sigma principles can also be used for the improvement of non-manufacturing, administrative, and service functions. Thus, they argue that the service industry in a modem society represents well over two-thirds of the entire economy and can bring substantial benefits. In this chapter we discuss, using presentations and case studies, how Six Sigma can be used to improve non-manufacturing, administrative, and service processes.

In terms of possible benefits of management tool utilization, users cite improvements in planning activities as a key benefit of management tool utilization in production and service organizations. These findings reveal that the focus is on gaining benefits in planning, which implies that several other areas are still ripe for improvements since management tools could bring about significant improvements in different areas, depending on the purpose and nature of the tool.

Also, our examination of the impact of management tools on improvements in various areas can serve as an important motivator for further and even more intensive utilization of management tools in the future. With the promise that the utilization of management tools will improve productivity and efficiency in all processes in organizations, organizations will show more interest either in investing in management tools or just boosting the utilization of tools that are already in the organization.

To sum up, our results provide an important starting point for becoming familiar with the current state of management tool utilization in production and service organizations, explain how management tools are used within the framework of organizational departments, and provides evidence on the impact of management tool utilization on productivity or efficiency.

3.7Limitations and future research direction

In terms of limitations, we can emphasize following ones. First, the sample size we used was small, but it was still enough to draw relevant conclusions. Second, a limited number of management tools was included in the survey. Some organizations may use other management tools not included in the survey. Third, the survey was conducted among Slovenian employees/organizations. Since Slovenia can be seen as a developing economy in Central and Eastern Europe, future generalization of findings to other economies that have different historical development paths could be limited. Finally, the link between productivity/efficiency and the utilization of management tools was assessed by those employees who use the tools. Thus, the possible effect of management tool utilization on productivity was only assessed based on the opinions of respondents.

The most probable directions of future research will be the following. First, expand the current survey to other countries in the region whose historical developmental paths are different than that of Slovenia (e.g., Poland, Hungary, Austria). In that framework, we could identify the utilization of management tools in organizations operating in well-developed economies, as well as in those in a transitional state. Second, to enhance the relevance of this research about the utilization of management tools in various types of organizations, we should check whether organizations use any management tools for improving their work other than those included in our list. Furthermore, new or recently developed management tools should be identified and included in further research. Third, a more detailed survey instrument to identify the link between management tool utilization and their benefits is needed. The most important future research direction will probably be to empirically examine the link between the utilization of management tools and actual productivity in organizations. One way to examine this link would be to ask respondents what productivity was like before and after they started using certain management tools. Despite the possible effect of self-assessment evaluation [85], we would obtain insight into the contribution of tools to increasing productivity; we would also understand which tools contributed most significantly to increasing productivity. A deeper examination of the contribution of single management tools to improvements in various areas in organizations will more comprehensively explain the contribution of those tools to making improvements. Finally, the discussion of the possible benefits of management tool usage could be expanded.

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