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Sales Performance in Greece Case Study
Executive Summary
The paper explores a case study, Factors Affecting Firms’ Performance: The Case of Greece and the solution offered whereby Liargovas and Skandalis (2010) claimed that training business processes to establish and handle financial and non-financial incentives can influence business performance monitoring. The paper provides an alternative solution, collaboration, focused on proper communication and information sharing. Essentially, adequate collaboration can enhance business performance with lower-level and higher-level employees utilizing their social capital to support their firm’s objectives.
Problem (Issue) Statement
Between 1997 and 2004, Greek industrial firms experienced poor financial and non-financial performances primarily due to high leverage and poor debt-to-equity ratio. The firms faced these issues regardless of their capacity to compete in the international market and minimizing the cost of business by embracing technology. The firms faced an uncertain time as they failed to utilize appropriate financial measures such as stock market returns, Return on Assets (ROA) and Return on Equity (ROE), net profit margin, and stock market returns, among other measures (Liargovas & Skandalis, 2010, p.185). However, the firms could change their fortunes if they employed appropriate business strategies such as learning, avoiding business inertia, and improving their flexibility to adjust to changing circumstances based on the nature of stakes at risk.
Analysis
Various financial and non-financial factors influence firm performance. According to Liargovas and Skandalis (2010), financial drivers influencing organizational performance include leverage, liquidity, capitalization, and investment, while non-financial drivers include the size of a firm, its age, location, and type and nature of exports (p.188). In testing the impact of financial and non-financial factors on firms’ performance, the authors revealed that liquidity, net investment ratio, leverage, firm size, fixed to total assets, location, and export activities all impact firm performance. Using this finding, the authors claimed that Greek firms need to identify ways to utilize the above-identified factors to improve their financial and non-financial performance.
Key Decision Criteria
Bad business management decisions can impact financial and non-financial aspects negatively. Managers have the sole responsibility of improving business performance by automating business processes, optimizing decision-making, and picking systematic approaches to enhance performance (Kasim, Haracic, & Haracic, 2018, p.30). Without considering these issues, it becomes impossible for managers to achieve business goals that can only result from effective business performance. In the case of Greek firms, managers needed to establish methods of integrating both financial and non-financial business perspectives to enhance performance. Business performance also depends on the relationship between innovation and efficiency outcomes. Sanders (2014) pointed out that business managers must train their organizations to focus on practices that stabilize a positive relationship between innovation and outcomes while contextualizing specific measures to enhance flexibility (p.3). However, in making decisions impacting business processes and improving performance, managers must focus on financial and non-financial incentives, as Liargovas and Skandalis (2010) pointed out in their case study. Despite the impact of the authors’ framework on business efficiency, an alternative model/framework can help the business maximize Return on Investment (ROI) and become profitable to meet their goals.
Alternatives Analysis
Although firms can improve their performance by establishing the impact of financial and non-financial incentives, firms such as the Greek firms analyzed in the Liargovas and Skandalis (2010) case study can explore alternative avenues. Business Process Management (BPM) addresses process automation whereby firms explore how they conduct business, their entire business process life cycle, the impact of their business strategy on financial and non-financial performance (Kasim et al., 2018, p.32). In developing a business strategy to guard performance, the Business Process Management approach highlights the significance of devising communication channels between higher-level and lower-level employees and the importance of involvement and engagement. Kasim et al. (2018) added that firms should map their business strategies to respond to quality improvement and consistency, updated innovation measures, risk removal, and maximization of assets and returns (p.32). Firms can also improve their financial performance by furnishing their competitive intensity. Sanders (2014) claimed that process management includes process control, process improvement, and process design (p.5). If possible, this model will establish processes and structures to force change, enhance processes, and achieve competitive priorities related to cost, quality, flexibility, innovation, and service.
Recommendations
Business process efficiency focused on enhancing a firm’s performance through financial and non-financial incentives can benefit from proper manager-employee collaboration. Collaboration covers an information-sharing process whereby all parties responsible for meeting business efficiency understand and contribute to ideal information-sharing, responsibility planning and implementation procedures identification, and resource allocation and efficient use. Liargovas and Skandalis (2010) claimed that in this era of globalization, firms need to identify competitive business structures, engage in microeconomic research to establish the relationship between theory and practice, and gauge the impact of their business processes on firm financial and non-financial prospects (p.185). Concerning this perspective, one of the effective methods of meeting firms’ financial and non-financial goals relates to the nature of managerial decisions and their impact on the collaboration process. Additionally, through collaboration, firms can establish a positive relationship with broader markets by gaining trust among employees and supporting a type of information-sharing that commits to social capital and responds to globalization needs.
Action and Implementation Plan
Firms seeking to implement collaboration strategies need to understand the significance of both vertical and horizontal communication and decision-making. These firms must also support an open-door policy whereby employees from junior and senior levels can freely voice their opinions to managers and feel the heat of their contribution. However, the collaboration policy can focus on Business Process Management on one hand and financial and non-financial incentives such as liquidity, net investment ratio, leverage, firm size, fixed to total assets, location, and export on the other. Combining these two frameworks by gauging each against business performance separately can enhance performance management.
References
Kasim, T., Haracic, M., & Haracic, M. (2018). The improvement of business efficiency
through business process management. Economic Review: Journal of Economics and Business, 16(1), 31-43.
Liargovas, P. G., & Skandalis, K. S. (2010). Factors affecting firms’ performance: The case
of Greece. Global Business and Management Research: An International Journal, 2(2), 184-197.
Sanders, J. (2014). Process management, innovation, and efficiency performance: The
moderating effect of competitive intensity. Business Process Management Journal.
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