ORGANIZATIONAL PERFORMANCE

The Impact of Global Factors & the International Business Environment on Organisational Performance

The Impact of Global Factors & the International Business Environment on Organisational Performance

Introduction

Organisational performance is a multidimensional construct to evaluate the position of an organisation relative to internal or external standards. The construct is widely used in academic research for assessing the effects of various structures, cultures, or strategies. In organisational practice, organisational performance evaluations are used to monitor, legitimise, and reinforce current practices; to initiate change; and to define top managerial compensation.

Discussion

The environment of business is marked by change. Huge environmental shifts—such as the growth of technology, the globalisation of the economy, the changing demographics of the workforce, changing customer demands, increased competition, and the tightening regulatory environment—have pressed organisations to rethink their underlying assumptions, and their organisational structures and systems, to position themselves for success in the midst of such turbulence. The traditional bureaucratic organisation model was not built for flexibility and does not fit a turbulent marketplace.

To achieve and sustain high levels of business performance and quality of work life (QWL) for employees in the highly competitive and rapidly changing marketplace, organisations have increasingly moved away from the bureaucratic structure of the past and embraced a series of practices, which collectively define the high-performance organisation. The high-performance approach is intended to be comprehensive and superordinate; application of subcomponents (e.g., process reengineering, customer-supplier partnerships, work cells) in a piecemeal way is seen as a partial and incomplete solution to the complex problem of sustaining organisational excellence in a turbulent environment.

Factors Influencing Organisational Performance

For an organisation, the first kind of situation - an unusual or novel experience - can occur when a group or unit within the global network makes a positive and unexpected contribution of information or knowledge that has an impact on organisational performance. Hewlett-Packard, for example, had to re-examine its organisational view of the capabilities of its Singaporean affiliate when presented with a clear example of the ability of the Singaporean design team to move beyond adaptation to innovation. When such questioning leads to changes in attitude about the marginality of a particular unit, as well as a re-examination of the organisation's view of its foreign operations, the trigger event moves the firm toward a more ethnorelative level of readiness.

Multinational firms' executives seek professional tools to make sound and effective strategic decisions about doing business internationally and consider the growing economic role of culture in the life of a business organisation. This idea is recognised by intellectual champions of the business community who take into consideration cultural dimensions in determining their choice of organisational practices in foreign operations and product positioning and respond to globalisation by incorporating noneconomic parameters into their strategy making.

Global Decision-making

Global decision-making environments are characterised by rapid change, uncertainty, and complexity, and they therefore enhance the impact of mind-sets on organisational decisions and outcomes. At the information gathering stage, for example, cognitive structures influence attention patterns by focusing attention on certain facets of the environment while blocking ...