Addressing the challenge of complexity with the development of the performance "ESP" conceptual framework to guide sustainable organisational development

Fontannaz, Suzanne Elizabeth (Stellenbosch : University of Stellenbosch, 2007-12)

Thesis

ENGLISH ABSTRACT: A fundamental shift has occurred from the industrial age, traditional worldview to the knowledge age, emerging worldview. The implication of this shift is that organisations can no longer rely on an enduring competitive advantage for sustainable results. This raises questions about the relevance of the existing organisational performance approaches in addressing the challenge of complexity, particularly with regard to the validity and reliability of the established performance management frameworks. In the industrial age, financial measures were sufficient for measuring organisational performance. However, the emergence of the networked economy implies that a more composite measure is required, which reflects the diversity of stakeholder interests. The research confirms that, whilst there is no universal agreement in defining organisational performance, there is agreement that sustainable organisational performance is a combination of growth (social and economic measures) and profitability (financial measures). Further, the research confirms the existence of gaps, which undermine organisational performance. These gaps originate from the divergent approaches to organisational performance, which can be traced through the evolution of organisational development theory and management practice. Existing research studies collaborate the existence of these divergent approaches in determining organisational performance. These approaches include execution, strategy and people, representing the ‘ESP’ of organisational performance. Execution refers to a process based, micro perspective of organisational performance, whilst strategy and people refer to the systemic, macro approaches. In conditions of hyper-change, execution is considered to be the key determinant of organisational performance, whilst the traditional, strategy approach is found to be essential in addressing the challenge of complexity. The emergence of the networked economy implies that a more composite, people approach is required to address the challenges associated with increasing connectivity. The research proposition contends that an execution culture is necessary for addressing the challenge of complexity. This culture is dependent on the strategic fusion of the divergent strategy and people approaches and the existence of a strategic paradigm throughout the organisation. Organisational performance resides in an organisation’s ability to integrate the divergent approaches, to develop the necessary dynamic capabilities for sustainable organisational performance. The Performance ‘ESP’ framework reflects the integration of these approaches and provides a visual confirmation of the research proposition. The level of execution is determined by the existence of a strategic paradigm throughout the organisation, which is determined by individual performance, defined by the level of effectiveness, strength (individual) and partnership (‘ESP’). The development of a strategic paradigm is particularly relevant in the South African context, where historical factors have inhibited the level of empowerment within organisations. It is recommended that organisations apply the Performance ‘ESP’ index as a diagnostic tool to assess the existence of an execution culture to address the challenge of complexity. The purpose of the assessment tool is to complement the financial measures of performance, to ensure a balance between profitability and growth, to ensure sustainable organisational performance.

AFRIKAANSE OPSOMMING: Daar het ‘n fundamentele verandering plaasgevind van die industriële tydperk en tradisionele wêreldbeskouiing na die kennistydperk en opkomende wêreldbeskouing. Die implikasie van hierdie verandering is dat organisasies nie meer kan staatmaak op ‘n deurlopende mededingende voordeel vir volhoubare resultate nie. Dit laat vrae ontstaan oor die toepaslikheid van die bestaande organisatoriese prestasiebenaderings om die uitdaging van kompleksiteit te hanteer, veral met betrekking tot die geldigheid en betroubaarheid van die bestaande prestasiebestuursraamwerke. Tydens die industriële tydperk was finansiële maatstawwe voldoende om organisasieprestasie te meet. Die opkoms van die netwerk-ekonomie impliseer egter dat ‘n meer saamgestelde maatstaf nodig is, wat die diversiteit van die belange van belanghebbers weerspieël. Die navorsing bevestig dat, hoewel daar geen universele ooreenkoms is in die definisie van organisasieprestasie nie, daar wel ooreenkoms is dat volhoubare organisasieprestasie ‘n kombinasie is van groei (sosiale en ekonomiese maatreëls) en winsgewendheid (finansiële maatreëls). Daarbenewens bevestig die navorsing die bestaan van gapings wat organisasieprestasie ondermyn. Hierdie gapings ontstaan uit die uiteenlopende benaderings tot organisasieprestasie, wat gevolg kan word deur die evolusie van organisasie-ontwikkelingsteorie en bestuurspraktyk. Bestaande navorsingstudies gebruik ‘n samestelling van hierdie uiteenlopende benaderings om organisasieprestasie te bepaal. Hierdie benaderings sluit in uitvoering, strategie en mense, wat in die Engelse afkorting die ‘ESP’ van organisasieprestasie verteenwoordig. Uitvoering verwys na ‘n prosesgebaseerde mikroperspektief van organisasieprestasie, terwyl strategie en mense verwys na die sistemiese makrobenaderings. In omstandighede van hiperverandering word uitvoering gesien as die sleutelbepaler van organisasieprestasie, terwyl die tradisionele strategiebenadering noodsaaklik is vir die hantering van die uitdaging van kompleksiteit. Die opkoms van die netwerk-ekonomie impliseer dat ‘n meer saamgestelde, mensbenadering nodig is om die uitdagings te hanteer wat saamgaan met groter onderlinge verbondenheid. Die navorsingsvoorstel se uitgangspunt is dat ‘n uitvoeringskultuur nodig is om die uitdaging van kompleksiteit te hanteer. Hierdie kultuur is afhanklik van die strategiese samesmelting van die uiteenlopende strategie- en mensbenaderings en die bestaan van ‘n strategiese paradigma dwarsdeur die organisasie. Organisasieprestasie hang af van ‘n organisasie se vermoë om die uiteenlopende benaderings te integreer en die nodige dinamiese bekwaamhede te ontwikkel vir volhoubare organisasieprestasie. Die prestasie- of ‘ESP’-raamwerk weerspieël die integrasie van hierdie benaderings en voorsien ‘n visuele bevestiging van die navorsingsvoorstel. Die vlak van uitvoering word bepaal deur die bestaan van ‘n strategiese paradigma dwarsdeur die organisasie, wat bepaal word deur individuele prestasie, gedefinieer deur die vlak van doeltreffendheid, sterkte (individueel) en vennootskap (‘ESP’). Die ontwikkeling van ‘n strategiese paradigma is veral toepaslik in die Suid-Afrikaanse konteks, waar historiese faktore die vlak van bemagtiging binne organisasies geïnhibeer het. Daar word aanbeveel dat organisasies die Prestasie ‘ESP’ Indeks toepas as ‘n diagnostiese instrument om die bestaan van ‘n uitvoerende kultuur te bepaal vir die hantering van die uitdaging van kompleksiteit. Die doel van die bepalingsinstrument is om die finansiële maatstawwe van prestasie aan te vul om sodoende ‘n balans tussen winsgewendheid en groei te verseker en dus volhoubare organisasieprestasie te verseker.

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