jon kevin loebbaka dissertation defense february 8, 2008 factors defining the relationships between...

Jon Kevin LoebbakaDissertation Defense

February 8, 2008

Factors Defining the Relationships between Safety Management Strategies

and Safety Performance

Jon Kevin LoebbakaFebruary 8, 2008

Doctoral Dissertation DefenseMarshal Goldsmith School of Management

Alliant International University


February 8, 2008

Dissertation Committee

Dr. Alfred Lewis

(Chair)

Dissertation Oversight and Strategic Management

Dr. James Sullivan Strategic Management

Dr. Greg Lorton

General Management of Regulated Business

Activities and Strategic Management


February 8, 2008

Jon Kevin Loebbaka

Education• B.S. Electrical Engineering University of Tennessee• M.B.A. in Management Ashland University

Industrial Experience• 22 Years of Industrial Safety Experience in Production,

Maintenance and Engineering Roles in the states of Tennessee, Kentucky, Indiana, Ohio, North Carolina, and California.

• 12 Years General Management Experience

Current Occupation• General Manager Alu Menziken Aerospace UAC


February 8, 2008

Research ProblemBackground - Safety Issue Turbulence

• Safety performance first became important as States implemented workers compensation laws in the 1900’s in response to the Industrial Revolution.

• Beginning in the 1970’s, OSHA’s safety regulations and reporting requirements have penalized poor safety performance resulting in fines and higher workers compensation insurance costs.

• Safety regulations have become increasingly more complex and compliance costly.

• Privatization of the workers compensation insurance market and increased litigation is deteriorating profits


February 8, 2008

• Global competition demands continuous improvements in productivity and financial performance, creating rapid changes in the workplace as firms deploy new processes and technologies.

• Resource constraints limit strategic pursuits.

• Safety costs affect profitability and increasing define or deteriorate competitive advantage

• How does the firm effectively translate safety strategies and align organizational capability from the executive suite through the work place?

Research ProblemBackground - Safety Issue Turbulence


February 8, 2008

Research ProblemSafety Management System Definition

A safety management system (SMS) embodies the means of ensuring that an organization is capable of achieving and maintaining acceptable standards of safety performance.

SMSs assimilate internal and external factors including; the firm’s safety environment and performance, the organization's capacity and capability, the organization's culture of commitment OSHA, NIOSH, & WC regulatory standards, safety technologies, compliance cost factors, and stakeholders’ influence.

SMS strategies manifest themselves through safety decisions and action


February 8, 2008

SMS Input Output Model


February 8, 2008

Global Model

Business Environment

StrategicResponsiveness

Business PerformanceFinancial Performance / Regulatory Performance and Compliance / Societal Standing

StrategicAggressiveness

Strategy CenterSupport Activities

Information SystemsHuman Resources

Perception of Environment

StrategicPosture



Strategy CenterCore Activities

Production / MarketingFinance / R&D


StrategicPosture



Strategy Center Regulated Activities

Safety & HealthEnvironmental Compliance


StrategicPosture

Strategy Integration

CompetitiveRivalry

NewEntrants

NewTechnology

Customers Suppliers Regulations Stakeholders

Strategy Integration


February 8, 2008

Research Model

SMS Posture

SMSAggressiveness

Safety Performance

SMSResponsiveness

SMS Responsiveness

Gap

SMS Aggressiveness

Gap

Perception of Environmental Safety Issue Turbulence

H1H2

H3

High

HighDegree of Coordination Integrating Individual’s

Knowledge

Low

Degree ofCooperation

amongStakeholders

Low

Behavioral School

Poor SystemsReactive Efforts

Management School

Emergent SystemsBest Practices

EngineeringSchool

Planned SystemsAccepted Practice

HealthSchool

No SystemsAd Hoc Efforts

H5

H6b H6a

H6d H6c

H4


February 8, 2008

Independent VariablesSafety Issue Turbulence

Conceptual Definition: Safety issue turbulence was characterized through the complexity, rapidity, and predictability of change in safety regulations, workers compensation insurance rates and workers compensation state laws.

Operational Definition: Safety issue turbulence was measured through calculating the arithmetic mean from each respondent for 3 questions using 5-point numerical scales.

•Complexity of safety issues

•Rapidity of change

•Predictability of change


February 8, 2008

Independent VariablesSafety Issue Turbulence

Complexity of Safety Issues


February 8, 2008

Independent VariablesSMS Aggressiveness

Conceptual Definition: SMS aggressiveness was characterized by the discontinuity and speed in which safety strategies are conceived and deployed in response to safety issues.

Operational definition: SMS aggressiveness was measured through calculating the arithmetic mean from each respondent for 6 questions using 5-point numerical scales.

• Planning for regulatory change • Strategies to address new safety issues • Implementation of new safety technologies • Interaction with regulatory agencies • Interaction workers compensation, insurers • The overarching focus of the SMS staff


February 8, 2008

Independent VariablesSMS Aggressiveness

Discontinuity and Speed of Strategies


February 8, 2008

Independent VariablesSMS Responsiveness

Conceptual definition: SMS responsiveness was characterized by the ability of management and the organizations systems and staff to respond to changes in the safety environment.

Operational definition: SMS responsiveness was measured through calculating the arithmetic mean from each respondent for 5 questions using 5-point numerical scales including:

Involvement of top management, Climate of the organization, Competence & capacity of the SMS staff


February 8, 2008

Independent VariablesSMS Responsiveness

Management Mentality, Capability, Competence, Capacity


February 8, 2008

Independent VariablesSMS Posture

Conceptual Definition: The SMS posture articulated the reactive or proactive nature of the SMS. Reactive SMSs are focused on minimal compliance. Proactive SMSs strive to gain competitive advantage moving beyond compliance efforts.

Operational definition: SMS posture was measured through calculating the arithmetic mean from each respondent for 13 questions using 5-point numerical scales. • Policy & Leadership – Goals, Communication • Organizational Infrastructure – Accountability, Rewards • Strategic Planning – Who develops the SMS plan, Scope, Audits • SHEQ Management – Procedures, Training • Contractors – Communication, Contract administration • Performance Monitoring – Measures • Continuous Improvement – Employee involvement


February 8, 2008

Independent VariablesSMS Posture

Strategic Planning

Continuous Improvement


February 8, 2008

Intervening VariablesSMS Aggressiveness GapSMS Responsiveness Gap

Conceptual Definition: The SMS aggressiveness gap and SMS responsiveness gap was a measure of the alignment between an organization’s SMS aggressiveness and SMS responsiveness and that of its safety issue turbulence.

Operational definition: The SMS aggressiveness gap and SMS responsiveness gap was calculated as the absolute difference between the scores of SMS aggression and SMS responsiveness respectively and safety issue turbulence from each respondent. These gaps ranged in value from 0 to 4.


February 8, 2008

Dependent VariablesSafety PerformanceConceptual definition: Safety performance was a collective measure of both the positive and negative outcomes of the safety management system. The questions measured the organization’s safety performance in the following areas; overall safety performance; OSHA recordables, lost work days, serious incidents or fatalities, workers compensation insurance premiums; and the organizations relationship with regulatory government agencies, workers compensation insurance companies, safety consultants, and employees.

Operational definition: Safety performance was calculated as the arithmetic mean from each respondent of 10 questions. Each question will be evaluated using a 5-point numerical scale. Respondents in some questions will be allowed to answer, “not applicable or do not know the answer”. In this case the arithmetic mean for safety performance will be calculated from those questions answered.


February 8, 2008

Dependent VariablesSafety Performance


February 8, 2008

SMS Posture Attribute Cooperation Coordination

Policy and Leadership Communication Goals

Organizational Infrastructure

Accountability Rewards

Strategic PlanningWho develops

planScope of plan

Plan audits

SHEQ Management Training Procedures

Contractors CommunicationContract

Administration

Performance Monitoring Measures

Continuous Improvement

Employee Involvement

High

HighDegree of Coordination Integrating Individual’s

Knowledge

Low

Degree ofCooperation

amongStakeholders

Low

Behavioral School

Poor SystemsReactive Efforts

Management School

Emergent SystemsBest Practices

EngineeringSchool

Planned SystemsAccepted Practice

HealthSchool

No SystemsAd Hoc Efforts

1

3

5

53

Independent VariablesSafety School Orientation

Conceptual Definition: The SMS safety school orientation characterized the reactive or proactive nature of the SMS. Reactive SMSs are focused on minimal compliance. Proactive SMSs gain competitive advantage moving beyond compliance efforts.

Operation definition: Management school orientation was determined through calculating the two arithmetic means of the cooperation and coordination labeled questions and mapping the results into the axes to determine the health, behavioral, engineering or management school orientation.


February 8, 2008

Research Hypothesis Null HypothesisStatistical

Test

1There is an inverse relationship between the SMS aggressiveness gap and safety performance of the firm.

There is no relationship between the SMS aggressiveness gap and safety performance of the firm.

Correlation(Pearson’s r)

2There is an inverse relationship between the SMS responsiveness gap and safety performance of the firm.

There is no relationship between the SMS responsiveness gap and safety performance of the firm.


3There is a direct relationship between SMS aggressiveness and SMS posture.

There is no relationship between SMS aggressiveness and SMS posture.


4There is a direct relationship between SMS responsiveness and SMS posture.

There is no relationship between SMS responsiveness and SMS posture.


5

There is a direct relationship between SMS posture and safety performance.

There is no relationship between SMS posture and safety performance.


Research Hypotheses Summary


February 8, 2008

Research Hypotheses Summary

Research Hypothesis Null HypothesisStatistical

Test

6a

The Safety Performance of the firm will be optimized when the SMS posture has a management school orientation.

There is no ranking among safety school orientations with respect to safety performance.

ANOVA

6bThe Safety Performance of the firm will be lesser when the SMS posture has a behavioral school orientation.


6c

The Safety Performance of the firm will be further reduced when the SMS posture has a engineering school orientation.


6dThe Safety Performance of the firm will be lowest when the SMS posture has a health school orientation.



February 8, 2008

Research Plan

• Descriptive Correlational Study

• Interval Data was measured on 5 point Likert scales

• Primary data was collected through questionnaires.

• Confidentiality to participants was maintained

• Risk to participants was minimal.

• SPSS Data analysisH1, H2, H3, H4, H5 Pearson’s r CorrelationH6 a, b, c, d ANOVA Comparison of Means


February 8, 2008

Research Population and Sample Frame

Target population included all employers operating within the United States, governed by OSHA regulations, and required to carry workers compensation insurance.

Intended survey respondent was any individual possessing safety and health responsibility or knowledge within such an organization.

600 surveys were distributed among safety and health professionals attending the 95th annual National Safety Council Congress and Exposition in Chicago Illinois, October 15-17, 2007.

156 completed samples were collected (26% Return Rate).


February 8, 2008

Validity and Reliability

The survey instrument was validated through an extensive literature review of highly respected authors on the topic of safety strategy (Hansen, Geller, Krause, etc.).

Review of the survey’s validity and clarity was sought from: dissertation chairperson, Dr. Alfred Lewis; and dissertation committee members, Dr. James Sullivan and Dr. Greg Lorton; Tom Quick, Bureau Veritas’ global safety systems vice president; and several safety and health professionals familiar with SMS strategies.

VariablesCoefficient

alpha

Safety Issue Turbulence 0.538

SMS Aggressiveness 0.644

SMS Responsiveness 0.684

SMS Posture 0.847

SMS Cooperation 0.708

SMS Coordination 0.756

Safety Performance 0.764


February 8, 2008

Variable Descriptive Statistics (N=156)

Variable Scale Mean Range SD

Safety Issue Turbulence 1 - 5 3.11 1.33 – 4.67 0.664

SMS Aggressiveness 1 - 5 3.16 1.67 – 5.00 0.709

SMS Responsiveness 1 - 5 3.37 1.00 – 5.00 0.712

SMS Posture 1 - 5 3.21 1.85 – 4.85 0.677

SMS Cooperation 1 - 5 3.21 1.67 - 5.00 0.735

SMS Coordination 1 - 5 3.22 1.71 – 4.71 0.703

SMS Aggressiveness Gap 0 - 4 0.81 0.00 – 2.53 0.588

SMS Responsiveness Gap 0 - 4 0.80 0.00 – 2.60 0.573

Safety Performance 1 - 5 3.12 1.60 – 4.38 0.581


February 8, 2008

Safety SchoolOrientation

Frequency

Safety Performance

Mean Range SD

Management School 76 3.3642 2.20 – 4.33 0.47389

Behavioral School 12 3.6908 2.86 – 4.38 0.45932

Engineering School 21 3.0076 2.00 – 3.90 0.51309

Health School 47 2.6419 1.60 – 3.38 0.42653

Variable Descriptive Statistics (N=156)


February 8, 2008

Hypothesis 1

There is an inverse relationship between the SMS aggressiveness gap and safety performance of the firm.

This hypothesis confirmed an important relationship between; A firm’s future financial and societal safety outcomes, and management’s ability to foresee the complexity and rapidity of change in safety regulations, workers compensation laws and insurance requirements.

Hypothesis 1

Linear Regression with95.00% Mean Prediction Interval

0.00 1.00 2.00 3.00 4.00

SMS_Aggressiveness_Gap

1.00

2.00

3.00

4.00

5.00

Sa

fety

_P

erf

orm

an

ce

Safety_Performance = 3.34 + -0.27 * SMS_Aggressiveness_GapR-Square = 0.07

Supported [r = -0.273, p = .001, N = 156]


February 8, 2008

Hypothesis 2

There is an inverse relationship between the SMS responsiveness gap and safety performance of the firm.

Hypothesis 2


0.00 1.00 2.00 3.00 4.00

SMS_Responsiveness_Gap

1.00

2.00

3.00

4.00

5.00

Sa

fety

_P

erf

orm

an

ce

Safety_Performance = 3.28 + -0.19 * SMS_Responsiveness_GapR-Square = 0.04

Supported [r = -0.188, p = .019, N = 156]

This hypothesis confirmed an important relationship between; A firm’s future financial and societal safety outcomes, and the organization’s SMS climate, competency, capacity, and its management mentality.


February 8, 2008

Hypothesis 3

There is a direct relationship between SMS aggressiveness and SMS strategic posture.

Hypothesis 3


1.00 2.00 3.00 4.00 5.00

SMS_Aggressiveness

1.00

2.00

3.00

4.00

5.00

SM

S_

Po

stu

re

SMS_Posture = 1.60 + 0.51 * SMS_AggressivenessR-Square = 0.28

Supported [r = 0.532, p < .001, N = 156]

This hypothesis confirmed an important relationship between; management’s mindset in its willingness to create timely SMS strategies in response to future safety issues and the extent to which the organization’s safety posture will be proactive.

SMS Change ManagementUse of Technology

Response to RegulationsInteraction with RegulatorsSMS Strategy Integration


February 8, 2008

Hypothesis 4

There is a direct relationship between SMS responsiveness and SMS strategic posture.

Hypothesis 4


1.00 2.00 3.00 4.00 5.00

SMS_Responsiveness

1.00

2.00

3.00

4.00

5.00

SM

S_

Po

stu

re

SMS_Posture = 1.47 + 0.52 * SMS_ResponsivenessR-Square = 0.30

Supported [r = 0.545, p < .001, N = 156]

This hypothesis confirmed an important relationship among; the competence and capability of SMS managers and staff, the organization’s safety climate, the robustness of the organization’s safety systems, and the extent to which the organization’s safety posture will be proactive.

Management InvolvementSMS Surveillance

SMS Policy and ProceduresStakeholder Knowledge

Risk Propensity


February 8, 2008

Hypothesis 5

There is a direct relationship between SMS posture and safety performance.

Hypothesis 5


1.00 2.00 3.00 4.00 5.00

SMS_Posture

1.00

2.00

3.00

4.00

5.00

Sa

fety

_P

erf

orm

an

ce

Safety_Performance = 1.73 + 0.43 * SMS_PostureR-Square = 0.26

Supported [r = 0.505, p < .001, N = 156]

This hypothesis confirmed that as an organization’s SMS becomes more proactive, the organization’s performance on safety issues will improve.

Policy and LeadershipOrganizational Infrastructure

Strategic PlanningSHEQ Management

ContractorsPerformance MonitoringContinuous Improvement


February 8, 2008

Hypothesis 6

There is a ranking among safety school orientations with respect to safety performance.

6a

The Safety Performance of the firm will be maximized when the SMS posture has a Management School orientation.

6bThe Safety Performance of the firm will be lesser when the SMS posture has a Behavioral School orientation.

6c

The Safety Performance of the firm will be further reduced when the SMS posture has a Engineering School orientation.

6dThe Safety Performance of the firm will be lowest when the SMS posture has a Health School orientation.

Health School

Behavioral School

Management School

Engineering School

Degree of Cooperation

amongStakeholders

Degree of CoordinationIntegrating Individual’s

Knowledge

Low

Low

High

High

N = 12Mean = 3.6908

N = 47Mean = 2.6419

N = 76Mean = 3.3642

N = 21Mean = 3.0076

DecreasingSafety

Performance


February 8, 2008

Health School

Behavioral School

Management School

Engineering School


amongStakeholders


Knowledge

Low

Low

High

High

N = 12Mean = 3.6908

N = 47Mean = 2.6419

N = 76Mean = 3.3642

N = 21Mean = 3.0076

Hypothesis 6

DecreasingSafety

Performance

Management School

Behavioral School

Engineering School

Health School

HealthSchool

Uncooperative and uncoordinated safety environment Inability to leverage safety resources Impeded by a lack of relationships and linkages needed to exchange knowledge. Stakeholders lack the social capital needed to embed and deploy effective safety systems. Agency cost of coordinating safety knowledge is comparatively high Organization is mired in overcoming bureaucracy, politics and individualism. Low levels of safety performance


February 8, 2008

Health School

Behavioral School

Management School

Engineering School


amongStakeholders


Knowledge

Low

Low

High

High

N = 12Mean = 3.6908

N = 47Mean = 2.6419

N = 76Mean = 3.3642

N = 21Mean = 3.0076

Hypothesis 6

DecreasingSafety

Performance

Management School

Behavioral School

Engineering School

Health School

Engineering School

Mistrust and a lack of social capital prevent the adoption and sharing of safety resources. Safety systems and technologies integrated through the efforts of the organization's safety engineers and external safety resources. SMSs will be exalted and seem very important to the creating stakeholders and management. The potential richness of planned SMSs will be undermined by the lack of cooperation. Organizations identify safety hazards but realize unexpected lower levels of safety performance.


February 8, 2008

Health School

Behavioral School

Management School

Engineering School


amongStakeholders


Knowledge

Low

Low

High

High

N = 12Mean = 3.6908

N = 47Mean = 2.6419

N = 76Mean = 3.3642

N = 21Mean = 3.0076

Hypothesis 6

DecreasingSafety

Performance

Management School

Behavioral School

Engineering School

Health School

Behavioral School

High levels of cooperation between the goals of individuals and stakeholders within the organization. Low levels of coordination with respect to the integration of safety resources. Creates the relationships and linkages required to share and embed safety knowledge assets across the organization. Lack the systemic richness required to properly identify hazards and integrate them into meaningful safety systems. Cooperation between individuals improves safety performance and housekeeping.


February 8, 2008

Health School

Behavioral School

Management School

Engineering School


amongStakeholders


Knowledge

Low

Low

High

High

N = 12Mean = 3.6908

N = 47Mean = 2.6419

N = 76Mean = 3.3642

N = 21Mean = 3.0076

Hypothesis 6

DecreasingSafety

Performance

Management School

Behavioral School

Engineering School

Health School

Management School

Highly cooperative relationships and highly coordinated systems provide superior safety results. Coordination among the organization’s stakeholders rapidly institutionalizes safety knowledge and systems. Cooperation creates an environment where stakeholders integrate safety knowledge to create emergent systems and best practices.


February 8, 2008

Hypothesis 6

There is a ranking among safety school orientations with respect to safety performance?

6a

The Safety Performance of the firm will be maximized when the SMS posture has a Management School orientation.

6bThe Safety Performance of the firm will be lesser when the SMS posture has a Behavioral School orientation.

6c

The Safety Performance of the firm will be further reduced when the SMS posture has a Engineering School orientation.

6dThe Safety Performance of the firm will be lowest when the SMS posture has a Health School orientation.

Safety School

OrientationMean (A)

Safety School

Orientation (B)

MeanDifference

(A-B)Sig.

Management

3.3642 (N=76)Not Support

ed

Health 0.7223* 0.000

Engineering 0.3566* 0.044

Behavioral -0.3266 0.206

Behavioral3.6908

(N=12)Not Support

ed

Health 1.0489* 0.000

Engineering 0.6832* 0.003

Management

0.3266 0.206

Engineering3.0076

(N=21)Supported

Health 0.3657* 0.044

Behavioral -0.6832* 0.003

Management

-0.3566* 0.044

Health2.6419

(N=47)Supported

Engineering -0.3657* 0.044

Behavioral -1.0489* 0.000

Management

-0.7223* 0.000


February 8, 2008

Additional FindingsSMS Cooperation and SMS Coordination

1. There is a direct relationship between SMS cooperation and the safety performance of the firm. [r = 0.516, p < .001, N = 156]

2. There is a direct relationship between SMS coordination and the safety performance of the firm. [r = 0.441, p < .001, N = 156]

3. There is a direct relationship between SMS aggressiveness and SMS cooperation. [r = 0.512, p < .001, N = 156]

4. There is a direct relationship between SMS responsiveness and SMS cooperation. [r = 0.541, p < .001, N = 156]

5. There is a direct relationship between SMS aggressiveness and SMS coordination. [r = 0.493, p < .001, N = 156]

6. There is a direct relationship between SMS responsiveness and SMS coordination. [r = 0.489, p < .001, N = 156]


February 8, 2008

Contributions to Academia

• Creation of a knowledge management typology from which to assess SMS effectiveness.

• Furthered Lorton’s extension of Ansoff’s strategic success hypothesis to functional areas of regulated strategies.

• Validation of Abrams safety school orientations and their description of SMS postures.

• Provided empirical validation for Hansen’s spectrum of SMS characteristics.

Health School

Behavioral School

Management School

Engineering School


amongStakeholders


Knowledge

Low

Low

High

High

Inadequate Systems Reactive Efforts

No Systems Adhoc Efforts

Emergent Systems Best Practices

Planned Systems Accepted Practice


February 8, 2008

1. Proactive SMSs lead to higher levels of safety performance.

2. Organization’s that are attuned to current and future safety issue turbulence and subsequently plan the proactive nature of their SMS aggressiveness, SMS responsiveness and SMS posture, will experience higher levels of safety performance.

3. Higher degrees of both cooperation among the organization’s stakeholders and coordination in the distribution of the organization’s safety knowledge will create higher levels of safety performance.

4. Manager’s who integrate their SMSs within the firm’s overall strategic framework will create safer organizations than those managers who do not.

5. Managers who involve themselves in their SMSs, creation, implementation, rewards, and recognition will create higher performing organizations.

Contributions to Management


February 8, 2008

Safety Professional Leadership Profile

Safety Managerof Yesterday

Safety Managerof Today

Safety Managerof the Future

OrganizationalPerception

A “burden” Compliance OrientedValue Added Business

Leader

OrganizationalAlignment

No one cares or no thought goes into who supervises

safety

Reports to a director or shared services

function

Accountable to SeniorExecutive

Safety Orientation

Posters, days without lost time

accidents, boards and signs

Behavior based safetyAnd disciplinary

procedures

Six Sigma, financialprinciples, systems

thinking, and values driven safety

PersonalCharacteristics

SpecialistMinimal Planning

FirefighterConducts Inspections

GeneralistShort-Term PlanningIncident Rate FocusSafety CommitteeRegulatory Audits

M.B.A or Ph.D.Business KnowledgeRelies on VariationFacilitates Process

Employee FeedbackContinuous Improvement


February 8, 2008

Recommendations for Further Research

• Investigate knowledge management practices in the development and deployment of SMS strategies.

• Conduct a wider study of the behavioral safety school orientation to understand the influence of SMS coordination in SMSs where high levels of stakeholder cooperation are present.

• Further analyze the data collected in this study to rank the effectiveness of Hansen’s SMS characteristics with respect to safety performance.

• Extend Ansoff’s strategic diagnosis framework to the evaluation of organization’s functional level strategies in similarly regulated pursuits. (i.e. Quality, Financial, and Human Resources)


February 8, 2008

Questions?

jon kevin loebbaka dissertation defense february 8, 2008 factors defining the relationships between...

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