Centre for Strategy and Performance

Developing Business Excellence Models for performance measurement in organizations in Transitional Economies

After the end of World War II, the totalitarian Soviet regime introduced an autocratically governed command economy to Central and East European countries. For over 50 years nearly half a billion of people existed in political, economic and social pathology.

The transition to market economies started in 1989, after the Round Table of communists and the Solidarity Movement in Poland.

"One of the things that happened was that plenty of people who didn't know anything about Eastern Europe, socialism, communism, or what had been going on in these societies for the last decade flew into the countries and said, 'We know what's best for you.' They even wrote articles with titles like "What Is to Be Done." Although they weren't intentionally ironic, that was Lenin's title in his presentation of scientific socialism".

Prof. David Stark, Columbia University, New York, 2000

Terminology

Business Excellence Model:

Performance measurement framework used for self-assessment where key objectives are based on the Total Quality Management (TQM) principles.

Transitional Economy:

Economy in the process of transition from a centrally planned economy in a totalitarian regime to a free-market economy.

Background

Business Excellence Models were developed on the basis of a Total Quality Management philosophy in a free market economy. Organizations in a free market economy have been developed in democracies on the basis of social, democratic and professional values.

Organizations in post-communist countries have been developed in the economy that went through transformation from centrally planned economy in totalitarian regimes to a free market economy, where man was an object, not a subject of all the activities of the organizations,. These organizations had to transform their management functions into the ones compatible with the market economy and democracy. But there was no planned method or know-how for transforming the organization from one operating in a centrally planed economy to one that has to exist in a competitive environment.

Companies in post-communist countries were trying to adjust their function by simple implementation of “Western” methods and techniques of management. Problems appeared after a few years of such implementations. Organizations started to face serious issues with deployment of the strategies, with effectiveness and efficiency.

Well-developed capitalist countries created their performance measurement frameworks on the basis of existing values and long market economy experience. The Business Excellence Models are adequate for measuring organizational performance in those countries.

Because of their origins, Western frameworks could not identify the areas that are fundamental for effective performance measurement of organizations developed in post-communist countries.

That is why it is so important to modify existing Business Excellence Models - performance measurement frameworks - suitable for organizations that are transforming their operations from a centrally planned economy to a free market economy.

Research aims and objectives

The aim of the research is to modify Business Excellence Models in order to use them for performance measurement of organizations operating in transitional economies.

In order to achieve this aim, the research objectives are outlined as follows:

1. Identify the new criteria of Business Excellence Models that are important for measurement of organizational performance in transitional economies.
2. Incorporate the new criteria into the existing Business Excellence Models in order to create Modified Business Excellence Models.
3. Test and refine the Modified Business Excellence Models for using them as frameworks for performance measurement of organizations in transitional economies.

Main outcomes

The main outcomes from the project are Modified Business Excellence Models developed for performance measurement in organizations operating in transitional economies.

By using Modified Business Excellence Models, the organizations in transitional economies will have:

1. a proper source of data and information to support strategy deployment, continuous organizational improvement, business transformation and change programs.
2. a proper structure for the organization’s management system.
3. an effective framework to integrate various quality initiatives into consistent improvement programs.
4. a correct approach to the measurement of progress through periodic self-assessment.
5. an efficient test for the alignment of activities to strategy/objectives.
6. a rigorous and structured approach to organizational assessment (based on facts, not perceptions).

For further information please contact Tomasz Szejner Email: ts389@cam.ac.uk