Two Link Value Chain: Development, Managerial Capabilities and Performance

"What people respect about the companies is not how they are structured or their specific approaches to management, but their capabilities. You can't see or touch them, yet they can make all the differences in the world when it comes to market value and give investors confidence in future earnings" Smallwood & Ulrich (HBR 2004). The purpose of this study was to investigate the influence of "development, on creating superior managerial capabilities that impact on organizational performance". The employee perception survey, personal interviews with focus group employees in large, medium and small size organizations including both multinational and local organizations was done. The study findings are indicative of the influence of development variables: managerial development, managerial context, managerial discretion and learning culture on creating managerial capabilities. The study findings revealed "Two link value chain: development creating managerial capabilities and managerial capabilities creating performance". The organizations focusing on development: creating learning culture, investing on capacity building, and empowering managers to take managerial decisions, are more likely to have superior managerial capabilities. The organizations can capitalize on superior managerial capabilities and make it imitable competitive advantage over its competitors. The study finding can be used to develop consultancy framework for performance improvement. The organizational size and ownership has no direct impact on performance: however since smaller organization lack learning culture and development that influences on their managerial capabilities leading to low performance.