Organizational performance improvement

Organizational performance improvement is one of the fundamental enterprise tasks. This especially applies to the case when the term “performance improvement” implies efficiency improvement measured by indicators, such as ROI, ROE, ROA, or ROVA/ROI. Such tasks are very complex, requiring implementation by means of project management. In this paper, the authors propose a methodological approach to improving the organizational performance of a large enterprise.

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In the contemporary business environment, characterized by rapid changes, performance improvement becomes a significant challenge for each enterprise, which can not be addressed by a single activity, nor a project, but rather by a series of continuous activities at all organizational levels. The bottom-up, or top-down approach to the implementation of such activities does not meet the requirements of involving all the employees, which leads to the conclusion that their combination is needed, depending on the situation and the objectives to be achieved.

Namely, although organizational performance is perceived through the measures of efficiency, effectiveness and adaptability, its improvement begins at the lowest level of elements comprised by these measures. Therefore, it is important to analyze individual performance measures in order to initiate the process of performance improvement. The issues to be addressed in this process include (Armstrong, 1994).

The requirements set by the performance improvement process are very complex and should be, therefore, addressed by an appropriate methodological approach, which should lead from general to detailed insights, as well as from abstract insights to practical solutions. Besides, the modeled approach should be pragmatic enough to be applied to an existing problem, which leads to the need to design a multi-stage process of the organizational performance improvement process.

Independent of the chosen methodological approach and implementation strategy, the authors’ research on performance improvement has demonstrated that treatment of such tasks as projects, including the utilization of project management principles, leads to significantly improved results. On this basis, the authors have developed a project-based approach to the performance improvement presented in this paper. The organizational performance improvement process should produce results that enhance the efficiency of the entire business.

Therefore, taking into account that such a process is important for designing efficient organizations, it can be understood that it is treated as significant by both theorists and practitioners. There are many different models of organizational performance improvement consisting of several stages. The model in Figure 1 shows a four-stage process. Each of the stages consists of several activities, which lead to the design and implementation of an adequate solution, possibly using a feedback connection a few times.