In the modern world, there is a high level of competence. Creating a work culture based on employee involvement is essential for improving performance and making the organization more competitive. Increased performance can impact employee satisfaction and well-being, affecting the organization (PricewaterhouseCoopers, 2019). Human resources are the driving force in leading the organization to success, so ways to enhance their productivity must be implemented in the workplace. High-performance working and high-performance work organizations need to be analyzed to determine best practices in helping employees be more efficient.
The first step in analyzing high-performance working (HPW) is determining its concept along with identifying a high-performance work organization (HPWO). Although there are various definitions of HPW, its concept refers to stimulating effective employee involvement and commitment in order to increase the level of performance (PricewaterhouseCoopers, 2019). HPWO indicates a flexible, nonbureaucratic organization that retains its competitive advantage by improving work processes (Do & Mai, 2020). HPWOs achieve high-performance levels through a mutual understanding of goals between managers and employees, accountability, and good information flow (Do & Mai, 2020). The concepts of HPW and HPWO refer to activities that create an environment characterized by continuously increasing performance.
Components of HPW
The basic components of HPW are leadership, employee reward, and organization development. Leadership, being the first of the components, can be characterized by several styles, each affecting performance in a different way. Leadership style is a combination of various traits and behaviors used to interact with subordinates and achieve particular objectives (Al Khajeh, 2018). Leadership style influences the organization’s culture and, subsequently, organizational performance. For example, the transformational leadership style focuses on developing employees’ value systems and skills and increasing their motivation levels (Al Khajeh, 2018).
Transformational leadership affects performance by teaching people to look beyond their self-interest by meeting their needs, intellectually stimulating, or inspiring them (Al Khajeh, 2018). In contrast, the democratic leadership style has the potential for poor decision-making, but it values the employees’ opinions and allows them to make decisions with the managers (Al Khajeh, 2018). This leadership style positively impacts performance by objectively giving employees praises and criticism and enhancing their sense of responsibility (Al Khajeh, 2018). While the two styles seem different, they have similar performance outcomes showing that this component needs to be examined more.
In addition to the leadership styles discussed above, a few more are worth mentioning but more with the purpose of minimizing their usage. For instance, transactional leadership focuses on exchanging targets and end rewards between the employees and the management (Al Khajeh, 2018). This leadership style does not promote creativity and innovation and, consequently, does not impact performance much (Al Khajeh, 2018).
The charismatic leadership style, on the other hand, is similar to the transformational in terms of motivation and inspiration (Al Khajeh, 2018). However, charismatic leaders produce happy but dependent followers who show negative performance in the long term (Al Khajeh, 2018). The autocratic leadership style can be effective but only for a short time because it restricts communication, severely affects employees’ satisfaction, and causes conflicts within the organization (Al Khajeh, 2018). The last leadership style, bureaucratic, focuses on completing tasks according to procedures but does not develop or motivate people (Al Khajeh, 2018). Accordingly, although there are various leadership styles, only a few of them positively impact performance in the long term.
Following that, another component of HPW is employee reward which reflects people’s expectations of work. Rewards can be defined as desirable or valued outcomes that satisfy employees (Al Naqbi et al., 2018). Generally, higher performance is shown when people receive both financial and non-financial rewards rather than only one of the two (Al Naqbi et al., 2018). Financial rewards refer to bonuses or increased salaries, whereas non-financial ones are represented by recognition or praise (Al Naqbi et al., 2018). Employees should be rewarded if they contribute to the organization’s success, stimulating them to perform better.
Organizational development (OD) is identified as one of the HPW’s components. OD refers to planned development in a company’s culture using behavioral science (Miremadi et al., 2021). OD aims to change the company’s values and attitudes, so it can meet the demands of varied external factors (Miremadi et al., 2021). To achieve the main goal, OD focuses on the alliance between structure, procedures, culture, and people within the organization (Ahmadi et al., 2020). A crucial role here is played by organization performance, which can be identified as the level of a company’s performance compared to its goals and objectives (Ahmadi et al., 2020). OD is vital for improving effectiveness to meet the changes outside of the organization.
Sustained Organization Performance
Defining the meaning of sustainability in the workplace is necessary to determine the link between HPW and sustained organizational performance. Sustainability refers to a company’s ability to achieve its mission, operate over a longer period, and have an influence on the market (Zhang et al., 2019). Sustained performance in the organization depends on commitment, strategic orientation, and organizational change, with top managers being responsible for long-term decision-making (Zhang et al., 2019). Sustained organization performance contributes to extensive sources of funding and determines the company’s ability to operate successfully (Zhang et al., 2019). HPW and sustained organization performance account for the organization’s continuous functioning.
The link between HPW and sustained organization performance can be evaluated by looking at innovation processes. Sustainability, as an indicator of steady growth, can be characterized by technological innovation (TI) and management innovation (MI) (Zhang et al., 2019). In recent research, the impact of both was measured by using questionnaires filled out by top managers such as chief executive officers (Zhang et al., 2019).
The results determined that TI and MI positively contribute to organizational performance, with beta values of 0.329 and 0.227, respectively (Zhang et al., 2019). Moreover, sustainability was evaluated to have a 0.454 beta value, which indicates a significant influence on organizational performance (Zhang et al., 2019). The evaluation shows that sustainability in general and TI and MI as its characteristics positively impact performance in the organization and therefore are connected to HPW.
There needs to be an analysis done on how HPW affects employees’ mental health to determine the link between HPW and employee well-being (EWB). EWB refers to people’s satisfaction with job experience that can be associated with work-related problems due to stress (Wibowo et al., 2019). The stress can be caused by a heavy workload, social interactions, and the organizational environment, which is referred to as a working social climate (SWC) (Wibowo et al., 2019). Factors that are related to EWB and can influence performance include competencies, the significance of tasks, feedback, internal and external motivation, and overall job satisfaction (Wibowo et al., 2019). HPW and EWB are connected in relation to employees’ enthusiasm and ability to be productive in a set work environment.
The link between HPW and EWB can be evaluated by looking at the relation between the two. In recent research, HPW’s impact was measured by conducting a survey with forty-eight statements among managers and supervisors (Wibowo et al., 2019). The results determined that more than 68 percent of changes in EWB are influenced by HPW, indicating a direct relationship between them. Moreover, if HPW increases, EWB increases as well, whereas, with decreased HPW, EWB decreases too (Wibowo et al., 2019). The evaluation shows that employee well-being depends on high-performance working and, with lower performance, can result in stress.
Competitive advantage needs to be identified to determine its link to HPW. In relation to performance, a company’s competitive advantage is represented by human resources, selection, recruitment, training, and involvement (Jyoti & Rani, 2017). All of the above help to achieve the company’s goals and affect its success. For example, training contributes to enhancing employees’ efficiency, which subsequently improves organizational performance (Jyoti & Rani, 2017). At the same time, HPW focuses on people’s skills and knowledge, consequently causing competitiveness (Jyoti & Rani, 2017). HPW can increase an organization’s competitive advantage in accomplishing goals by focusing on employee development.
The link between HPW and competitive advantage can be evaluated by looking at organization performance. Performance depends on knowledge and skills that can indicate competitiveness (Jyoti & Rani, 2017). In recent research, organization performance was measured using five-point questionnaires and employees’ and managers’ data sets (Jyoti & Rani, 2017). The results determined a 0.636 beta value proving that HPW has a significant impact on organizational performance (Jyoti & Rani, 2017). The evaluation shows that processes within the organization that encourage employees’ development increase its competitive advantage and positively affect the overall performance.
The link between HPW processes and cultural change can be addressed by looking at the processes within an organization. Cultural changes refer to the transformation of old procedures and the shift towards new beliefs, values, and practices (Eti-Tofinga et al., 2018). The impact of the changes on the level of performance depends on the nature of the new culture and relies on change management which focuses on several factors. For example, commitment to change refers to employee loyalty and the perception of change as non-negotiable (de Waal, 2018). The process of change also concentrates on leadership, relying on change leaders who do not have the baggage of the past (de Waal, 2018). Cultural changes and HPW are connected in terms of increasing an organization’s competitiveness by adapting to the new demands.
Barriers to HPW
Barriers to HPW revolve around its implementation and can vary in different organizations but have some general similarities. The first barrier focuses on the resistance to changes that are required to increase the level of performance (Flood & Klausner, 2018). Other limitations can be characterized by poor communication and lack of trust when people prefer to work individually rather than in teams that pursue a common goal (Flood & Klausner, 2018). Goal clarity is one of the most important aspects of HPW, which can create obstacles to employee rewards and performance measurement (Flood & Klausner, 2018). The main barriers to HPW have their distinctive features that can be seen in various organizations.
To summarize Section 1, a conceptual framework of HPW can be analyzed by reviewing HPW’s components and its relation to several aspects of the workplace, such as employee well-being, competitiveness, and performance. HPW depends on a leadership style that can motivate people or discourage them, a rewards system to stimulate them, and the overall development of an organization. Several barriers need to be overcome to implement HPW, improve employee well-being, and increase competitiveness.
The next step in analyzing high-performance working is examining performance management (PM). PM refers to the effective management of individuals and teams with the goal of achieving high levels of organizational performance (PricewaterhouseCoopers, 2019). PM involves processes defined by the main purpose of a company that can include development, administrative, or other goals (Pulakos et al., 2019).
Performance management requires specific behavior from both managers and employees. Managers have to set clear priorities and valuation criteria, regularly check in with their subordinates to follow their progress and provide formal and informal feedback with the last expressed in praise and coach (Pulakos et al., 2019). Employees have to clarify the expectations to ensure their understanding, determine who in the team is responsible for each expectation, ask for feedback, and use the feedback to improve performance (Pulakos et al., 2019). Performance management is a complex process that focuses on research from many different areas.
Stages of the Performance Management Cycle
Performance management can be seen as a cycle with several stages. The performance management cycle focuses on organizational improvement and increased competitiveness (Treiger & Fink-Samnick, 2017). The cycle starts with determining the strategy and the purpose of a company and includes five main stages. The first stage is performance planning which includes connecting employee expectations with organizational goals, setting standards, and setting anticipated results (Treiger & Fink-Samnick, 2017). The next stage refers to ongoing feedback with communication-based on dialogues and timely responses to the events (Treiger & Fink-Samnick, 2017).
The third stage is employee input which focuses on employees providing self-ratings on the set standards (Treiger & Fink-Samnick, 2017). The next stage refers to performance evaluation, identifying and evaluating the main competencies to achieve the expected results (Treiger & Fink-Samnick, 2017). The last stage is the performance review which determines what has occurred during the set period and plans developmental activities (Treiger & Fink-Samnick, 2017). The performance management cycle intends to set specific goals, set standards with required competencies, and determine a development plan based on the results.
Performance reviews and development are important aspects of performance management. PM focuses on the improvement of human capital as a significant part of the succession planning process (Treiger & Fink-Samnick, 2017). Development is crucial for enhancing individual and organizational performance as it is considered to be one of the key elements of life-long learning competency (Treiger & Fink-Samnick, 2017). Review is the final stage of the performance management cycle that determines the achievements and further actions (Treiger & Fink-Samnick, 2017). Reviews typically happen once a year to highlight people’s skills and contributions to work (Treiger & Fink-Samnick, 2017). Performance reviews and development play an essential role in identifying employee capabilities and determining ways for improvement.
Line managers are typically the employees who may be most reluctant to the changes required to increase the level of performance. The managers may consider tasks, such as participation in the performance review process, irrelevant or bureaucratic because they cannot prove cause and effect relations of human resources management (Trullen & Valverde, 2017). With that being said, a few ways can be used to involve line managers in the performance review process.
First, the managers can be taught to comply with quality standards and apply root cause analysis for continuous improvement (Neirotti, 2018). Second, utilizing job rotation to other positions within the organization may help the line managers better understand the importance of tasks in the performance review (Neirotti, 2018). Third, the involvement of line managers can be increased if they are asked to provide feedback on the procedures or improvement ideas (Neirotti, 2018). Although line managers may be resistant at first, there are ways to make them interested by demonstrating the importance of the new processes.
The Contribution of PM
The contribution of the performance management process depends on whether it complies with key principles such as fairness, equity, and accuracy. Accuracy refers to the clarity of effective goal setting, control, feedback, review, and reward (Awan et al., 2020).
Fairness indicates that people are aware that their efforts will result in the desired outcomes (Awan et al., 2020). Moreover, fairness can enhance employees’ engagement and involvement if perceived positively, building a sense of self-worth (Awan et al., 2020). Equity refers to people’s desire to have an equitable work environment with their work achievements acknowledged with similar outcomes as their colleagues’ achievements (Awan et al., 2020). Performance management processes will be more efficient if they are clear, fair to employees’ perceptions of their work, and equitable to their expectations of the work of others.
The performance management process contributes to promoting challenges by utilizing stressors. Stressors categorized as challenges may cause pressure, but they can also energize and motivate people to accomplish goals by making them believe that they can overcome obstacles (Sun et al., 2019).
However, stressors do not have the same effect all the time because an employee could positively perceive challenging stressors and get invigorated by them one day and, on another day, feel like the same stressors are hindering them. People can feel confident in their capabilities to succeed by generating creative ideas and, at the same time, may undergo anxiety and burnout by experiencing a lack of fairness and equity (Sun et al., 2019). The performance management process can rely on stressors to encourage employees to take on challenges and apply creativity for growth, but it may affect their well-being.
Since challenge stressors can have both positive and negative effects, their connection to the performance management process should be evaluated by referring to creativity that employees can utilize to find solutions to the challenges. In recent research, challenge stressors were measured using Cavanaugh’s six-item scale and a sample item of an employee with a high workload (Sun et al., 2019). The research was based on equating modeling that compared theoretical, nested, and alternative models and showed that the effect of the stressors on creativity was a 0.352 beta value establishing a direct positive impact (Sun et al., 2019). The evaluation shows that if the performance management process correctly utilizes stressors, it can promote challenges and enhance creativity.
The performance management process contributes to building capability if it is focused on organizational capabilities (OCs). OCs can be defined as a company’s ability to deploy tangible and intangible resources to enhance performance with a concentration on the accuracy of goal setting to allocate the resources properly (Rehman et al., 2019). OCs refer to strategic management, external stakeholder relation, and operational capability determining a company’s advantage over others (Rehman et al., 2019). The performance management process that concentrates on organizational capabilities can contribute to building the capability of using resources to increase competitiveness.
The connection between capabilities and the performance management process can be seen by evaluating organizational capabilities (OCs) and organizational performance. In recent research, the two variables were assessed by collecting data from chief financial officers and general managers, measuring 15 items for OCs and 11 items for organizational performance (Rehman et al., 2019). The measured beta value of 0.679 has determined that OCs significantly impact performance (Rehman et al., 2019). The evaluation shows that if the performance management process focuses on organizational capabilities, it can build the overall capability to increase performance and competitiveness.
The performance management process contributes to recognizing and rewarding talent by utilizing procedures of talent management. The procedures include attracting, retaining, and developing personnel to recognize employees who can become leaders in the future (Almohtaseb et al., 2020). Talent management aims to put the right employee in the right position considering equity within an organization (Almohtaseb et al., 2020). The performance management process can rely on the procedures to recognize the best employees for each job position and develop a reward system to motivate their growth.
The connection between talent and the performance management process can be seen by looking at recruiting and rewards practices of talent management procedures. In recent research, the practices were assessed by using questionaries measured by four scale items (Almohtaseb et al., 2020). Recruiting and rewards were determined to have a crucial impact on organizational performance, with beta values being 0.393 and 0.435, respectively (Almohtaseb et al., 2020). The evaluation shows that if the performance management process implements talent management, it can recognize talented employees during recruiting and determine ways to motivate them with rewards to perform better.
An analysis of a business case for human resources management (HRM) needs to be done to explain the business case for HPWO. In this relation, the business case for HRM can imply transformation to new practices that aim at accomplishing goals better (Mtetwa & Mutambara, 2020). The business case requires a complete understanding of the changes and the expected results by stakeholders represented by the customers, employees, investors, and suppliers (Mtetwa & Mutambara, 2020). A strong business case must comply with a company’s business strategy considering internal and external factors (Mtetwa & Mutambara, 2020). The business case presents ways to transform old processes into new, improved ones.
The decision to become an HPWO has to begin with a clear business case that determines specific problems, solutions, and possible outcomes. Specific problems can vary in different organizations, but the common issue revolves around the market’s demand to be more competitive (Do & Mai, 2020). The possible solutions are discussed further in this paper but mainly focus on cultural change to a high-performance (de Waal, 2018).
The solutions need to consider obstacles generated from internal factors such as employee resilience and external factors that differ in each organization. The possible outcomes also range but are mostly aimed at increasing the level of performance to achieve strategic goals by focusing on employee well-being, competitive advantage, promoting challenge, and other aspects discussed above. The business case has to align with the organization’s needs and support the business strategy to improve performance.
To summarize Section 2, performance management can be utilized to implement HPW. PM as a cycle helps to determine a company’s goals, establish an evaluation system with feedback, and plan further development for employees. PM is characterized by its key principles and will be efficient if those principles are followed. PM can use stressors, capability development, and rewards to achieve its purposes. Those responsible for PM should develop a business case to align the transformation into an HPWO with a company’s business strategy.
There are a few important aspects to creating and sustaining a culture of HPW. A culture is a foundation that allows for selecting, evaluating, optimizing, and sustaining new practices (Cochrane, 2017). A culture of HPW has to be adaptive to changes and innovation, focusing on achieving outstanding results (Cochrane, 2017). Creating a culture depends on leaders and is considered one of the main leadership challenges because it combines changing processes and minds (Cochrane, 2017). A high-performance culture brings meaning to procedures within an organization, becoming a priority for all employees who want to make improvements without being forced (Cochrane, 2017). A culture of HPW needs to be understood and accepted by the employees to be successful.
Leadership styles with a clear implementation strategy are vital in supporting a high-performance culture. Employees rely on their leaders and adopt their behaviors, such as those that demonstrate resolving issues (Cochrane, 2017). Leaders help to transform principles into practices, clarify expectations, and sustain productive operations (Cochrane, 2017). With that being said, leaders need to focus on their development, which has to be targeted to acquire specific skills and knowledge (Cochrane, 2017). A high-performance culture requires investing resources in people to build trust, enthusiasm, and commitment.
Trust is one of the essential components of creating and sustaining a high-performance culture. Trust can be defined as an emotional connection that allows people to rely on each other in different situations (Tripathy, 2019). Managers should rely on leadership styles to build trust with their subordinates. For example, transformational leadership inspires and stimulates employees creating a bond that enhances trust (Al Khajeh, 2018). Organizations could also implement the democratic leadership style, which focuses on the value of employees’ opinions and is open in terms of praise and criticism (Al Khajeh, 2018). Moreover, people tend to trust their leaders more in times of stress, so managers have to stand by their followers, give them strength and provide comfort, creating a sense of security (Tripathy, 2019). Building trust establishes honesty between leaders and employees and confidence in each other.
Another significant component of the culture of HPW is enthusiasm. Enthusiasm refers to the encouragement to work hard, take advantage, and use one’s potential (Hasanuddin & Sjahruddin, 2017). Enthusiasm is expected to contribute to the growth and development of employees through self-motivation (Hasanuddin & Sjahruddin, 2017). As discussed above, leadership style is vital in creating a high-performance culture, and transformational leadership is recommended to inspire people to be enthusiastic about their work (Al Khajeh, 2018). Enthusiasm at the workplace can also be increased by utilizing performance management. Organizations can rely on building capabilities to increase competitiveness and confidence and thus increase employees’ will to work more (Rehman et al., 2019). A reward system can also be used to enhance people’s enthusiasm by showing appreciation for their effort (Almohtaseb et al., 2020). Enthusiasm can be built by encouraging employees’ ability and desire to perform better.
One more component of a high-performance culture is a commitment to the organization. Commitment is defined as employees’ loyalty and attachment to a company (Hendri, 2019). Commitment refers to the acceptance of organizational goals and values, confidence in working with the company, and a strong desire to do so (Hendri, 2019). Employers can rely on the accuracy principle of performance management by setting clear goals that are easier to accept (Awan et al., 2020). People’s loyalty and attachment are influenced by the feeling of being treated fairly by the organization (Hendri, 2019). Therefore, another way to increase the level of commitment is by focusing on fairness and equity principles (Awan et al., 2020). Commitment can be built by implementing practices that employees would want to accept and follow.
The analysis shows that best practices in helping employees be more efficient revolve around creating a high-performance culture. The culture exists within an HPWO and depends on various factors. The main factor is leadership which affects the ways employees work and react to different situations. An important step here is using performance management to regulate the process of becoming an HPWO. Both leadership and PM help to overcome obstacles and contribute to sustaining a culture of HPW. Creating and sustaining a high-performance culture should be a part of the business case for HPWO and comply with the key principles of performance management.
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