From Not-So-Good, to Good, to Great, and Beyond: An Empirical Analysis of an Illustrative Field Example

Good-to-great does happen, but “what about ‘not-so-good’?” The current article extends the research on Collins’ seminal study, “Good-to-Great,” and asks, and answers, the question, “Can a ‘Not-so-Good’ company become a great company, and if so, how?” This research proposes a theoretical framework to explain the relationship between a “consistent pattern of decisions and actions” and financial performance, and then tests this framework, in a field experiment, on privately-held, Tier One Automotive Supplier. It views the performance of the company, through the lens of the Neoclassical Theory of the Firm, the Principal–Agent Theory of the Firm, and the Theory of Constraints. The Neoclassical Theory establishes the principal of profit, or value, maximization, while the Principal–Agent Theory extends the profit maximization principal by adding agents, or economic actors. The Theory of Constraints, developed by Eliyahu M. Goldratt, presents a system-level management philosophy, for ongoing improvement. Using the combination of these theories, as a referent theoretical base to explain the trajectory of operational and financial performance of the focal company, this research seeks to provide insight on the firm’s success in achieving and sustaining great results. Findings indicate support for correlation, causation, and possible generalizability to other firms, and time periods.