MANAGING ENTERPRISE PERFORMANCE IN THE FOOD INDUSTRY - Polish Journal of Management Studies

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MANAGING ENTERPRISE PERFORMANCE IN THE FOOD INDUSTRY

Abstracts > Vol 5

Managing enterprise performance in the food industry
Anatoliy G. Goncharuk

Abstract: The paper is devoted to the development of important elements of the system of enterprise performance management. Author proposes to divide the entire staff of the enterprise into the three categories: main production personnel; subsidiary workers and engineering personnel; managers, clerks and other personnel. The  model of personnel motivation  and  model of internal performance benchmarking are developed. The results of successful introduction of these models on  the food enterprises of Ukraine are described.

Key words
: performance management; internal benchmarking; personnel motivation; food enterprise; Ukraine
JEL Codes: M12, L25, L66

Introduction

Due to the large number of processes, departments, staff and management levels, ensuring efficiency on medium or large enterprise is complex and very important task. Unlike small enterprises, here is not enough to evaluate the efficiency and seek assistance in the benchmarking agency (BBA or RBA) to select the firm-benchmark (see [1]). The complexity of the organizational system requires a multilevel approach and the application of different methods of performance management. In addition, given the significant national differences in various aspects, including mentality, the mere use of performance management techniques that are successfully implemented in practice of American or Japanese companies in the domestic environment may not lead to desired results. However, the ignoring of these methods by local companies, given the very small experience of their work in a market economy and, correspondingly, the weakness of domestic empirical and methodological base, it would also be unwise, as they have been formed and perfected over more than one decade. It makes us look for ways to create a special model, allowing domestic enterprises to adequately manage the performance, which should in one way or another rely on the experience of foreign companies and their methodology, but also take into account local conditions.
Among the variety of existing methods of performance management, in our opinion, the most applicable under conditions of Ukrainian food corporations, where often a directive (authoritarian) management system operates and workers put their personal interests ahead of corporate, are the methods based on the construction of a rigid vertical control, regular monitoring and control.  However, a system of performance management should not inhibit a motivation of employees and their desire to exercise creativity in work. Here it is expedient to use the mechanism of competition both from external competitors and from within the company
between the units and groups of workers (teams), which, combined with adequate incentive system, would ensure the unity of the direction of individual and corporate interests.
Identification of the best units (workers, groups) and processes, and desire of the remaining units to be the best within the enterprise can best be achieved by means of internal benchmarking tools. External competitiveness of the enterprise as a whole and its individual units and processes can provide tools of competitive and process benchmarking. However, to reach high enterprise performance based on various types of benchmarking and other techniques, it is necessary to develop a system of motivation, without which actions to improve efficiency will not be sustainable with long-term nature.
This study is directed to develop the important elements of the system of enterprise performance management
 a model of personnel motivation,  and  model of internal performance benchmarking , and to introduce these models on the food enterprises of Ukraine.


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Conclision

The best results were obtained for the medium enterprises with number of employees from 200 to 1000 people. However, it should be noted that all observed enterprises shown higher rates productivity growth in comparison with the growth of wages, and positive changes in other performance indicators: average labor productivity of all companies increased 18-89%, output-materials ratio grew 13-65%, energy efficiency raised 14-22%, and wastage declined 21-49% while average wage grew only 12-18%. The average cost of implementation was 275 UAH per employee. This suggests that the developed models are effective and able to improve the efficiency of enterprises without significant costs for their implementation.
This conclusion is confirmed by calculations of the economic efficiency of implementing models on the formula (4.1): the values for these companies are within the interval [2.4 ... 5.3]. This means that the proposed innovations (the introduction of the models) provide enterprises the cost savings, which is in several times higher than the costs of implementing them.
Despite the financial and economic crisis, these trends were continued into 2009. Hence, our models provide the stability and continuity of the process of improving the efficiency. They significantly help to enterprise managers to implement the basic task of performance management.

ZARZĄDZANIE WYDAJNOŚCIĄ PRZEDSIĘBIORSTWA W PRZEMYŚLE SPOŻYWCZYM

Abstrakt: Artykuł poświęcony jest rozwojowi ważnych elementów systemów zarządzania wydajnością przedsiębiorstwa. Autor proponuje by podzielić cały personel przedsiębiorstwa na trzy kategorie: główny personel produkcyjny, pracowników pomocniczych i kadra inżynierska, menedżerowie, urzędnicy i inni pracownicy. Opracowany został model motywacji personelu i model wewnętrznego porównania skuteczności. Opisane zostały wyniki udanego wprowadzenia tych modeli do przedsiębiorstw przemysłu spożywczego na Ukrainie.


 
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