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Practice Makes Profit: Business Practices and Firm Success

Author

Listed:
  • Richard Fabling

    (Ministry of Economic Development, New Zealand)

  • Arthur Grimes

    (Motu Economic & Public Policy Research & University of Waikato.)

Abstract

Which business practices set successful firms apart from others? We address this question using data from an official survey of almost 3,000 New Zealand firms. Questions cover: leadership, planning practices, customer and supplier focus, employee practices, quality and process monitoring, benchmarking, community and social responsibility, innovation, IT use, business structure and the competitive environment. Some of these are internal practices reflecting a firm’s resources and capabilities; some are characteristics of the external environment. We find that capital investment choices, R&D practices, market research and a range of employee practices are positively associated with firm success; industry structure is also a key determinant of success. The association between specific business practices and firm success is mostly independent of firm size, age and industrial sector, other than for export marketing.

Suggested Citation

  • Richard Fabling & Arthur Grimes, 2006. "Practice Makes Profit: Business Practices and Firm Success," Occasional Papers 06/1, Ministry of Economic Development, New Zealand.
    • Handle: RePEc:ris:nzmedo:2006_001
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    Cited by:

    1. is not listed on IDEAS
    2. Hong Shangqin & Philip McCann & Les Oxley, 2013. "Innovation in New Zealand: issues of firm size, local market size and economic geography," Chapters, in: Frank Giarratani & Geoffrey J.D. Hewings & Philip McCann (ed.), Handbook of Industry Studies and Economic Geography, chapter 19, pages 459-478, Edward Elgar Publishing.
    3. Fabling, Richard & Grimes, Arthur, 2009. "The “suite” smell of success: Complementary personnel practices and firm performance," Motu Working Papers 292632, Motu Economic and Public Policy Research.
    4. Paul Rodríguez-Lesmes & Luis H. Gutierrez & Juan Carlos Urueña-Mejia & Andres Ortiz & Ivan Medina Rojas & Mauricio Romero, 2023. "The role of local promoters in helping microentrepreneurs engage in digital business training. The case of Expertienda," Documentos de Trabajo 20902, Universidad del Rosario.
    5. Paul Winter & Hilary Devine & John Janssen & Chris Thompson, 2025. "Why not both? The effects of innovation and capital on productivity in New Zealand," Treasury Analytical Notes Series an25/12, New Zealand Treasury.
    6. Alexandra ZBUCHEA & Florina PÎNZARU, 2017. "Tailoring CSR Strategy to Company Size?," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 5(3), pages 415-437, September.
    7. Juan Carlos Urueña-Mejía & Luis H. Gutierrez & Paul Rodríguez-Lesmes, 2023. "Financial inclusion and business practices of microbusiness in Colombia," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(2), pages 465-494, June.
    8. Mare, David C. & Fabling, Richard & Stillman, Steven, 2011. "Immigration and Innovation," Motu Working Papers 291436, Motu Economic and Public Policy Research.
    9. Paul Rodríguez-Lesmes & Luis H. Gutiérrez & Juan Carlos Urueña-Mejía & Andrés Felipe Ortiz & Iván Darío Medina Rojas & Mauricio Romero, 2025. "The role of local promoters in helping microentrepreneurs engage in digital business training," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 15(1), pages 205-242, March.
    10. Francis Greene, 2012. "Should the focus of publicly provided small business assistance be on start-ups or growth businesses?," Occasional Papers 12/2, Ministry of Economic Development, New Zealand.
    11. Fabling, Richard & Grimes, Arthur, 2005. "Insolvency and economic development: Regional variation and adjustment," Journal of Economics and Business, Elsevier, vol. 57(4), pages 339-359.
    12. Fabling, Richard & Grimes, Arthur & Stevens, Philip, 2008. "A Comparison of Qualitative and Quantitative Firm Performance Measures," Motu Working Papers 292661, Motu Economic and Public Policy Research.
    13. Fabling, Richard & Grimes, Arthur, 2007. "HR Practices and Firm Performance: What Matters and Who Does It?," Motu Working Papers 292846, Motu Economic and Public Policy Research.
    14. David C. Maré & Richard Fabling & Steven Stillman, 2014. "Innovation and the local workforce," Papers in Regional Science, Wiley Blackwell, vol. 93(1), pages 183-201, March.
    15. H. R., Ganesha & Aithal, Sreeramana, 2020. "Rational Organizational Structure: For Brick-and-Mortar Lifestyle Retailers in India to Overcome Diseconomies of Scale and Protect Firm’s Sustainability (ROLS-b)," MPRA Paper 102553, University Library of Munich, Germany.
    16. Richard Fabling, 2007. "Just How Innovative are New Zealand Firms? Quantifying & Relating Organisational and Marketing Innovation to Traditional Science & Technology Indicators," Occasional Papers 07/4, Ministry of Economic Development, New Zealand.

    More about this item

    Keywords

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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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