Business Performance Management Abstract

BusinessPerformance ManagementAbstract

In the modernbusiness environment, the dynamic nature of business has compelledbusiness managers to come up with various strategies to remainrelevant in the industry. This is necessitated by the need bybusinesses to make profits, beat their competitors and importantly,satisfy the shareholders and customers. To achieve this, businessleaders have recognized the role played by innovation in performance.A quantitative case study approach is used to appraise the innovativetechniques that are used by two different companies, which forms thebasis for evaluating the role of innovation in business performance.The management of the companies reviewed employ different approachesto organizational structure, human resource and financial management.It is established that these techniques help the businesses to retainindustrial relevance, beat competition and keep their stakeholderssatisfied.

Business Management Performance

Contents

Abstract 1

CHAPTER 1: INTRODUCTION 4

1.1 Introduction 4

1.2 Background of problem 5

1.3 Objectives 5

1.4 Scope 5

1.5 Importance of study 6

CHAPTER 2: LITERATURE REVIEW 7

2.1 New approach to performance management system 7

2.2 Strategic and tactical planning 8

2.3 Impact of innovation on business performance management 9

CHAPTER 3: METHODOLOGY 11

3.1 Introduction 11

3.2 Research Design and Justification of methodology 12

3.3 Data collection 13

3.4 Instruments and Measurement: Methods of analysis and interpretation 13

3.5 Reliability and Validity 14

CHAPTER 4: DISCUSSION 15

4.1 Introduction 15

4.2 Analysis and Discussion of Case Studies 15

Case 1: HomeHealth: Delivering Activity-Based Costing 15

Case 2: Veterans Benefits: Discovering the cost of Doing Business Using ABC 17

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 19

5.1 Business performance practices and their impact on modern organizations 19

5.2 Techniques used in business performance management 19

5.3 Role of innovation in business performance 20

5.4 Recommendations 20

CHAPTER 1: INTRODUCTION

1.1Introduction

According tobusiness analysts, while managing business, organizations have toalign innovation with the business objectives that they have set forthemselves. As such, the management has to ensure that it gives equalattention to innovation and business, and at the same time, fosterthe culture of creativity in business. Given that there is nouniversally agreed upon way of managing this, Belenzon &ampBerkovitz (2010) assert that there are a number of ways that can beapplied to yield equally attractive results. In the modern businessenvironment, many organizations have taken the option of jointlydeveloping products and technology, which creates a path forexpansion and improved productivity. This does not forgo thenecessity to foster in-built innovation from the employees, as wellas the top management. Additionally, while aligning businessperformance and innovation, there has to be a delicate balancebetween the internal organizational environment and the externalindustrial environment. This is to avoid having conflictingresolutions to making a profitable and sustainable business model.

However,despite the wide documentation of the association between innovationand business performance, business management specialists assert thatmodern organizations are yet to fill the gap of success. This meansthat business performance and innovation are not only textbookdecisions, rather scientific and artistic undertakings. Most of thelarge businesses that have successfully integrated innovation intotheir business culture have records of exhaustive and detailedresearch into the elements of success in their respective industries.According to the available evidence, the most successful companiesare those that make a holistic and systematic approach to businessinnovation. The exploration review is a quantitative research forevaluating the innovative approach for effective business performancemanagement.

1.2Background of problem

Modern businessesare under constant pressure to change their approach in the dynamicbusiness environment. According to Dunning (2014), given the natureof globalization and the ever-increasing customer demand, businesseshave to ensure that they structure their operations to satisfy allstakeholders involved. At the same time, the competitive force inbusiness industry mounts the pressure on organizations to improvetheir operations. This, among many other challenges, makes itimperative for the businesses to improve their performancemanagement, so to remain relevant in the industry. The techniquesthat were used earlier on have been outdated, and the businesses haveno option but to improve their innovative approach towards effectivebusiness performance management

1.3Objectives

This paper shalllook to establish business performance management practices, whichare used to improve productivity and competition, and their impact onmodern organizations. At the same time, the researcher shall look atthe techniques that managers have used to put the resources availableto them, both human and material, to improve productivity,competitiveness, and industrial relevance. Thirdly, the researchershall evaluate the role of innovation in improving businessperformance.

1.4Scope

The main focus ofthis research the effectiveness performance management, which isidentified as the tactic that modern organizations use to improvetheir productivity, improve competitiveness and achieve success. Atthe same time, focus will be put on innovative techniques thatbusiness managers have used to make maximum use of their resources,as they work towards improving profits.

1.5Importance of study

The purpose of thepaper is to expand the knowledge base in business performancemanagement and innovation. While at it, the findings will besignificant for business analysts and practitioners for determiningthe direction that the shift in the business sector is taking. Thisis based on the analysis of strategies that various business managershave used to improve the productivity of their respective firms. Atthe same time, the findings will give a hint on the challenges thatmodern businesses are facing, pertaining to embracing innovation inincreasing productivity, competitiveness and industrial relevance. Atthe same time, the purpose of the paper shall be investigating thesuccesses and failures of the strategies that have been used bymodern business models, which is the first step towards increasedefficiency in the endeavor.

CHAPTER2: LITERATURE REVIEW2.1New approach to performance management system

Zott &amp Amit(2010) identify the importance of having the right resources for thepurposes of surviving in the modern turbulent business environment.While these resources can be obtained through the input of themanagement, some of them take the effort of research and investmentto obtain. One of these resources is financial ability. Demil &ampLecocq (2010) asserts that financial resources are the backbone toobtaining almost every other resource that a business needs to grow.The financial resources come in the form of the organization’sliquidity, investments from the shareholders, donor funds and others,such as loans. In the modern business environment, a strong financialcapability is indicative of a stronger competitive position,regardless the nature of industry which a business is operating in.

According to Stroh &ampReilly (2011), human resource is still the most important asset inbusiness. The management is compelled to recognize that the peopleworking for the organization hold the major key to success, as theydetermine the general direction that the productivity trend takes.While most organizations may lack the right human resource at thebeginning, there are a number of innovative ways of obtaining justthe right people for the right job. These include continuoustraining, expatriate assignments and outsourcing (Downes, Varner &ampHemmasi, 2010). Similarly, to improve the capability of the humanresources, the management has to pay attention to internal andexternal forces that shape the organizational environment, which iskey to obtaining and retaining the best human resource. According toClaessens, Kose &amp Terrones (2012), a business that has a strongfinancial capability, backed by an able human resource, is able towithstand the pressures facilitated by increased competition andglobalization.

2.2Strategic and tactical planning

Teece (2010)highlights the role of strategy in innovation. According to Teece(2010), strategy should be viewed as the process that the managementuses to accomplish certain organizational objectives. Beforerecommending a certain strategy to the organizational leadership, itis the role of the management to evaluate the possible methods thatcan be employed, while at the same time, measuring them againstindustrial forces. While doing this, Nickels, McHugh &amp McHugh(2011) assert that the management has to factor in elements such ascompetitive differentiation, conduct a SWOT analysis and evaluate thebusiness’ position in the market, before going ahead with a certainstrategy. As such, while undertaking a strategic planning process,the management has to highlight the business’ strengths, and backthis up with innovative approaches, to come up with the best strategyto achieve organizational objectives.

In businessmanagement, Casadesus-Masanell &amp Ricart (2010) define tacticalplanning as the initiatives, techniques and decisions that are neededto help the management utilize the resources in a way that they willachieve organizational objectives. While making tactical plans, theorganization’s managers develop new approaches to help theorganization tackle existing challenges, and make room for moreimprovement. According to Frezatti et al. (2011), tactical planningalso involves evaluation of the existing methodologies at every levelof the organization, and assesses their capacity to contribute to thegeneral organizational development. Longenecker et al. (2013) labeltechnical plans as short-term actions that organizations take, mainlybecause they are used to break down the whole picture into smallereasily comprehensible fragments. As such, a good tactical plan is onewith measurable and achievable short-term goals, however, with bolderobjective in the long run.

2.3Impact of innovation on business performance management

Melville (2010) saysthat one of the most important roles of innovation is creating a newenvironment and opportunities for business growth. This is becauseinnovation introduces new aspects and different approaches totackling daily business organization matters. As such, authors andbusiness analysts maintain that innovation is the single most vitalelement of business expansion. According to literature by Kanter(2015), innovation is part of technology management in organizations.Regardless, managers have to ensure that their innovative capacitiestake into consideration the organizational objectives, and anychallenges that may limit their usefulness. At the same time, therole of innovation in moving products and services into the marketshall not be overlooked, as it forms the basis for measuring thesuccess or failure of an organization.

Zott&amp Amit (2010) describe innovation as a strategic human resourceimperative. This is because innovation demonstrates the will of themanagement to propagate their ideas and vision for the organization.As such, the human resource leaders have to recognize the fact thathiring, organizational culture and training, all which are part ofproductivity enhancement, are guided by innovation. While picking theright people for the right job, the human resource managers have toensure that they can identify those with the ability to “thinkoutside the box” and come up with solutions to standing challenges(Dahlen, 2010). This can only be achieved by embracing and practicinginnovation at the organization.

Valdiserri&amp Wilson (2010) argue that a successful company is one thatrealizes the role of innovation and implements it to achieveprofitability and stronger competitive advantage. While managementinnovation includes administrative and organizational tasks,innovation helps the business to implement developments that aregeared towards success. On the same note, Lopez-Nicolas &ampMerono-Cerdan (2011) assert that innovation has a direct impact onperformance management, as it entails creation of an environment thatembraces change and business transformation.

CHAPTER3: METHODOLOGY3.1Introduction

In the precedingsection, literature review established that despite the applicationof Business Performance Management practices, researchers haveconducted little research to determine the best performancemanagement practices. The study employed and applied multi-facetedmethods aligned to primary and secondary sources of informationcollection. A theoretical context based on bodies of literatureformed the main part of secondary sources. The framework defined andexemplified the research problem, statement, and objectives as wellas sought to interrelations highlighted in the background structures.In the theoretical context, the research generated information by theliterature assessment from reports, previous studies, publications,library research, critiques, article journals, and web information.

On the other hand,the research paper employed illustrative case studies grounded onquantitative and qualitative approaches as the best approach forprimary data. Like in the theoretical context, the methodology facetof the paper drew on the support of a body of literature in thecollection of case studies. However, the case studies involved theapplication of detailed survey, analysis, documentations, andevaluations as well as the assessement of underscored aspects throughmulti criteria analysis by assessing the highlighted case studies oncurrent and historical contexts. This part of the researchmeticulously mapped out the research and presented findings aboutperformance management practices. The first task of the research wasto highlight projects conducted and then determined the effectivenessof the projects. In this regards, the research fused bothquantitative and qualitative information and then triangulated thedata to address the objectives of the research.

3.2Research Design and Justification of methodology

A methodologysymbolizes the organized and notional assessment of the methods thatone direct to a field of study to identify the purposes and values ofthe study. As such, it incorporates the conventional set of classes,procedures, and assumptions considerable to capture intentions andengender inclusive implications. In this regards, the researchapplied case studies based on documented evidence. The research paperjustifies the use of case studies as numerous scholars haveacknowledged its effectiveness. Yang &amp Li (2013), Haider (2013),and Case &amp Light (2011) contend that a case study delivers thebest mode of examination as it allows a researcher to undertakesurvey, develop a theoretical context, and gather multifaceted dataand analysis. In fact, the case studies employedused representational methodology, which allowed the construction ofinformation in social realities.

Yang&amp Li (2013) observe that the representational methodology doesnot hinge on objectivity but rather accentuates on inclusiveportrayals that gives dependability and confirmability to researchconventions. The approach utilizes an arrangement of quantitative andqualitative techniques to measure the research assumptions thus,allows the description of complexities within a research. Inaddition, the approach had an element of qualitative research, whichpermitted the researcher to discover the topic and comprehend theoccurrence within its framework. The case study approachfacilitated the researcher to do away with occurrences of unintendedbias by guaranteeing that the issue was explored through multiplelenses. Consequently, by understanding through the researchperception that archival information may provide some partiality, theuse of case studies as the approach to conduct the study wasdeliberated.

3.3Data collection

The study utilizedtwo approaches in gathering data: archival accounts and triangulationsuggestion from the cases. Archival accounts acted as replacements toopen-ended interviews and observations. The documented data from thecase studies provided the researcher with primary data to makeconclusions. In addition, a pilot study was presented to determinethe relevance of performance management practices withinorganizations as well as provide recommendations on the bestpractices. The researcher cultivated the necessary steps to offsetany shortcomings on the utilization of case studies thus, theresearch related the body of the literature generated with the casestudies’ findings. Furthermore, the researcher triangulated prooffrom multiple resources highlighted in the research. The researchfollowed numerous values and premises to tackle the challengespresented by the arduous nature of the study. The research utilizedmultiple sources of proof by comparing data from the two cases used.In addition, the research utilized a case study databank as a maidenaction to help recognize the most relevant sources.

3.4Instruments and Measurement: Methodsof analysis and interpretation

Thestudy utilized ordinal measures of exploration placed atintermissions to offer considerate information. The suggestion of themeasurements composed formed the dominant examination of the studyand then integrated the application of multi-criteriaanalysisand correspondence estimations as suggested by Yang &amp Li (2013)and Case &amp Light (2011).In this regards, the researcher conformed to post-positivismreinforced by representational approach. Data analysis was conductedthrough quantitativeand explanatory analysis of recorded evidence in the case studies.The research qualitatively analysed the recorded information againstliterature review as well as compared the data to historicalpractices in the areas of business management. In addition, theresearch analyzed documentary proof gathered across the two casestudies used and illustrated the proof to the current practicesconducted as highlighted in the body of literature.

3.5Reliability and Validity

In research,reliability indicates the level at which results become steady anddependable over period. In addition, an exact account happens of thecomprehensive research’s scheme, strategy, layout, and structure.In this regards, a research attains reliability if the outcomesattained become analogous to the same attitude. The study used atest-retest technique to establish the reliability of the research aswell as to define the constancy of the study developments from thecommencement of information gathering. Validity helped determinewhether the study evaluated the necessary data accordingly as well asguaranteed the fulfillment of the research’s objectives.

CHAPTER4: ANALYSIS AND DISCUSSION4.1Introduction

In the precedingsegment, the research identified case studies as the most appropriateapproaches for data collection and analysis. This chapter highlightsthe introduction of the assessed cases and the analysis of the casesto provide an objective and comprehensive discussion on the bestpractices for performance management. The research highlighted thecase studies that will help managers in European Organizations toutilize resources at their disposal to enhance competitiveness,productivity, and industrial relevance. In addition, the case studieswill help managers to understand the role of business intelligence asthe means of driving management to the next level. The researchutilized two cases: HomeHealth and Veterans.

4.2Analysis and Discussion of Case Studies Case1: HomeHealth: Delivering Activity-Based Costing

The manufacturingindustry is one of the principal sector internationally and thedriver of major economies such as China, USA, UK, and Germany.Business intelligence aligned to emerging technologies has formed thebasis of success for most economies across the world thus, it isessential to understand the role of ABC (Activity-Based Costing) inproviding a paradigm shift for these economies. However, currently,the industry faces several challenges emanating from outsourcing,competition, and failure by some companies to follow the setinternational standards. Although a number of organizations haveimplemented ABC, its alignment to the business success factors of acompany and profitability remains to be seen. In addition, mostcompanies have failed to interlink ABC to quality and performancemanagement, which has inhibited greater production despite theincreased innovations experienced today. The HomeHealth case studyhighlights how businesses can go beyond product cost and utilizeactivity-based data to assist them enhance procedures andperformance. In 1995, HomeHealth interlinked American Productivity &ampQuality Center and CAM-I to offer the best practice processes forperformance management. The case highlights the need for scheduledmanagement and performance measurement to offer best accountingprocesses and advanced management. In this regards, using ABC helpsbusinesses offer enhanced cost data for decision-making, costaccounting and control.

Efficiency inbusinesses driven by cost effective technologies and aligned to ABChelps companies to deliver quality products timely despite theescalated demands. In addition, the case study shows that ABC allowscompanies to schedule processes according to importance and urgencyas well as analyze the processes efficiently to improve services. Inaddition, involvement of all employees in scheduling and analysis ofactivities minimizes non-worth activities as well as reduces the costof documentation and planning. Marketing and budgeting remain the keyareas of success for manufacturing companies as recent success frommajor companies suggest. Companies like Apple, Microsoft, Samsung,and Google have created their present brand recognition from years ofmarketing and commitment to the highlighted strategies. In thisregards, these companies have sensed that marketing can enhanceproduction and sale of products, but they also need to budgetaccordingly.

In addition, correctbudgeting and evaluation allows a company to define all levels ofactivities and processes, adjust the cost of processes, allowapproaches grounded on processes consistent to the provision ofservices, and adjustment of targets. On the other hand, efficientbudgeting allows a company to cultivate the correct strategicplanning. Today, a standard and efficient ABC undertaking with thecorrect scopes, resources, and layouts allow companies to deliverbusiness expectations, but the business intelligence models used mustbe consistent to demands and the design contexts of a company. Inthis regards, companies need to employ design tools, change readinessevaluations, and risk assessments to their designed ABC models toensure that they track expenses effectively. As the case illustratesreducing costs helps a company to link cost objects, analyze areas offailures and success, and deploy all systems consistently to thecompany’s demands.

Afterthe adoption of ABC, the company’s performance management improvedas shown in the graph below. The Y-axis shows the change inperformance while the X-axis shows the adoption of ABC

Figure1: Change in Performance during the Adoption of ABC

Case2: Veterans Benefits: Discovering the cost of Doing Business UsingABC

Theexecution of any strategy in a company requires the management tounderstand all areas supportive to the processes of the company aswell as the expenses that the company will have to undertake torealize success. Performance management goes beyond capital, personalsystems, and human resources as it encompasses the metrics requiredfor success, processes, business intelligence tools, and managementsystems. This case highlights the need for companies to implement ABCin a way that helps the company to discover the cost of a goingconcern. In this regards, companies must undertake ABC in two phaseswhere the first phase involves establishment of a team, provision oftraining, development of an activity formula and meaning, productionof a VBA model, and development of processes. The second phaseinvolves the implementation of the identified model. It is essentialto understand that an ABC model involves both the identification andmanagement of costs thus, the definition of the relationships amongactivities, resources, and outputs is of immense importance.

Analysis

Itis essential to note that during the implementation of ABC in bothcompanies highlighted in the case studies, several challenges arose.Most importantly, the analysis of Veterans Benefits reveals that theimplementation of project logic of the cost utilization per thecomplication of product portfolio and undertakings provided achallenge to the company. For example, most companies todayexperience the same problem especially when they bill products indifferent measurements or when they conflate information necessary tosupply ABC approaches. In this regards, it is essential for companiesto cultivate efficient billing systems, transaction orientedstrategies, and warehouse systems to avoid such challenges. Althoughthe case studies provided in the research refer to specificcompanies, companies across different sectors such as retail,manufacturing, and service can apply the approach used inimplementing ABC to enhance performance management. From theinformation gathered, an efficient ABC model requires at least thefollowing items

Thetriangulation of data shows that the implementation of ABC results toincreased customer care, improved adoption of innovative approaches,enhanced employment engagement and increased profits.

Severalproducts

Atleast 300 employees

100different relevant process phases deliberated for assigned activities

Severalindividual flight events

Differentdrivers to allocate costs

Severalassignment logic and databases for implementation

Morethan 500 cost positions

20diverse source tables

Before implementingABC, HomeHealth conducted interviews to identify key areas,activities, and processes. The interviews recognized commonactivities such as scheduling, documentation of results, andcoordination. From the scenarios provided and the cost analysisconducted, the case study illustrates numerous benefits that emanatefrom the use of ABC and innovative business intelligence strategies.

Table1: Comparison of conventional costing to ABC at HomeHealth

Cost per Visit

(For traditional modules)

Comparison to Limits

Discipline

Cost per Visit (For ABC cost module)

Unit profit (For ABC cost module

$97.14

$1.35

Med Nursing

$98.09

($3.61)

$106.62

10.83

Psych Nursing

98.01

1.69

$75.95

(27.64)

Physical Therapy

97.98

0.02

$77.28

(26.32)

Occ. Therapy

89.71

7.39

$86.06

(17.94)

Speech Therapy

105.41

(14.39)

$107.96

(23.78)

Medical Care

117.47

(30.22)

49.26

2.78

Home Care

74.15

25.78

94.29

Overall

95.35

Thetable illustrates the importance of implementing ABC in HomeHealth

Belenzon&amp Berkovitz (2010) contend that implementing a viable ABC modelnot only improves performance management, but also results tocapacity planning and utilization, internal cost allocation, betterpricing, efficient controlled processes, standard reporting, andcustomer profitability. Teece (2010) and Vazakidis &ampKaragiannis (2011) support theconceptualization of ABC model suggested in the case studies byasserting that companies must assign resource costs efficiently andemploy the correct business intelligence models. In fact, Vazakidis&amp Karagiannis (2011) suggest astandard Resource Driver Rate Assessment as discussed in table 2. Forexample, with total costs for resources set at $70,000 and assuming afirm needs to implement two activities, which require 60% (K1) and40% (K2) of resource capacity, K1 would be performed 60 times and K250 times as shown below

Activity

Percent

Driver Quantity

Activity costs

Driver rate

K1

60

60

$42,000

0,7/K1

K2

40

50

$28,000

0,56/K2

Total

100

$70,000

Table2: Standard Resource Driver Rate Assessment

The analyzed cases have established the importance of ABC aligned tobusiness intelligence in performance management. Teece(2010) assert that performance management remains a key areain the business success factors of a company, but most companiesutilize conventional approaches to management, which inhibit growth.The case studies have illustrated that capital is important to acompany but without the requisite technologies and models, a companyis bound to fail. Although companies should concentrate on maximizingprofits, they should also concentrate on minimizing costs andproviding processes that inhibit costs effectively. In fact, an ABCmodel can help a firm realize its profitable products. For example,figure 1 below shows how an ABC model can help a company manage itsperformance by identifying profitable areas. The figure, also knownas ABC ‘S’ curve helps a company to determine breakeven productsand profitable products

As the case studies suggest, ABC has several benefits to a company.In fact, a body of literature supports the findings of the casestudies such cost allocation, profitability, and enhanced competitivecapacity. Table 3 below shows the main benefits of ABC as suggestedby the case studies and supported by studies from Zott&amp Amit (2010), Vazakidis &amp Karagiannis (2011), Teece(2010), and Melville (2010).

Benefits of implementing ABC

Score (out of 5)

Enhanced cost allocation

4.6

Better performance evaluation

4.2

Increased competitive capacity

4

Accurate service/goods costs

4

Elimination of waste and cost control enhancement

3.9

Increased profitability

3.8

Increased customer satisfaction

3.4

Anexpert analysis of the two cases, suggest that the implementation ofABC can enhance the business performance management of a firmgreatly. Table 4 below shows the changes in a firm’s performanceafter the implementation of ABC

Quarterly Median change in overall performance

Quarterly Real Percentage Change in performance

Quarterly percentage change in customer care Rate

Quarterly change in employment engagement

Mar-2002

241.00

1.10

0.52

76.90

Jun-2002

260.00

1.00

0.55

77.30

Sep-2002

265.00

0.80

0.55

77.90

Dec-2002

280.00

1.20

0.56

78.50

Mar-2003

285.00

0.40

0.59

79.60

Jun-2003

287.50

0.90

0.64

79.60

Sep-2003

295.00

1.30

0.66

80.10

Dec-2003

320.00

1.40

0.72

80.30

Mar-2004

325.00

1.00

0.77

81.10

Jun-2004

330.50

0.70

0.72

81.30

Sep-2004

330.00

0.70

0.71

81.50

Dec-2004

332.00

0.80

0.76

82.10

Mar-2005

333.00

0.80

0.78

82.70

Jun-2005

340.00

1.40

0.77

83.00

Calculatingthe mean of the quarterly change in business performance managementgives a mean of 301, which shows that the average change in businessmanagement improves after the implementation of ABC.CHAPTER5: CONCLUSION AND RECOMMENDATIONS5.1Business performance practices and their impact on modernorganizations

Businesses areincreasingly using technology to boost their innovation. While takinginto consideration internal factors such as organizational values andhuman resource, modern businesses are considering external factors,such industrial competition and growing customer demand. Using thisto set their standards, managers have embraced the role that isplayed by technology in improving productivity and efficiency. At thesame time, the modern business organizations have factored the roleplayed by the changing product costs and utility, and as such, cameup with innovative ways of managing critical organizationalresources. As identified in the literature review and supported inthe discussion chapter, the main organizational resources thatsupport innovation are human resource and financial resources. Byhelping businesses to align business strategies with cost effectivetechnology, innovation has proven to key to success in the modernbusiness environment.

5.2Techniques used in business performance management

Different companieshave the liberty of choosing their techniques to boost productivity.However, the paper has demonstrated that years of marketing researchand commitment to organizational objectives holds the key to fruitfulinnovation. While some companies concentrate on selling their brandimage, others use innovation to boost the productivity of theirworkforce, and generally, the success of their firms. At the sametime, other organizations use innovation to manage their finances,which is a strategy to reduce costs attributed to poor budgeting. Asestablished from the research paper, the execution of strategyfactors elements such as capital, organizational systems, humanresources and other metrics that are required for success. The bottomline remains that business leaders have to align their organizationalcapability with whichever strategies they choose to come up withinnovative ways of managing their performance.

5.3Role of innovation in business performance

From the casestudies reviewed, it can be concluded that innovation plays a keyrole in responding to trends and competition. This is because ithelps the business leaders to tell the general direction taken by theindustry, and as such, be in a position to predict the future. At thesame time, innovation helps businesses to maximize on the resourcesthat they already have. While outsourcing and borrowing may come inhandy when saving the business in harsh economic times, coming upwith innovative ways of utilizing the available resources to themaximum is a better option.

5.4Recommendations

Followingthe discussions and conclusion, this paper makes the followingrecommendations: –

  1. Business leaders should accelerate their firms’ transformation through IT innovation

Inthe modern business environment, top companies need IT leadershipthat has the drive to change the functioning of the entireorganization. A fast growing company is one that is characterizedby Paramount utilization of IT resources and assets, keeping in mindthe global trends in the same.

  1. There should be constant evaluation of business resources (human and material) to tell the business’ position in the current business environment

Atone point or another, organizations need to revisit their records toevaluate the condition of their resources. This means that themanagement needs to revise records of their human and materialresources from time to time, and make necessary changes whenevernecessary. Management analysts identify this as one of the majorfunctions of the human resource department.

  1. Customers, shareholders, and all other stakeholders in the business should be involved in the innovative process

Collectiveaction is born out of a unified effort by all stakeholders. Customersplay the key role of guiding the business to make improvements totheir products and services. On the other hand, the shareholders holdthe key to financial investment, which is needed for innovation to beactualized.

  1. Organizational plans should always be aligned with business objectives, so as to avoid unsustainable development through innovation

Whilemaking innovative decisions about businesses, the management issupposed to ensure that every decision made is sustainable. This isto avoid having conflict of interest in the future, as it may hinderthe organization from making any further progress. Sustainableinnovation creates an opportunity for further growth.

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