Mohammad Mosaddek Hussain :
(From previous issue)
The leadership´s inherent responsibility is to set out a Business Strategy in which Business Performance is defined: Business Performance must meet or exceed the expectations of the leadership. On the other hand, the bottom-up relation is a descriptive one: Measurement of Business Performance through selected indicators shows the management if expectations are met and gives vital information about necessary adjustments to the business processes that need to be made.
The administration of the company has to evaluate possible improvements or deteriorations and to act upon them in time. The auditing process can be done either internally or externally. Performance Measurement Systems were described in 1995 as “the set of metrics used to quantify both the efficiency and effectiveness of actions”ii.
The measurement process can be done in an automated way using information technology. The big companies have the financial ability and adequate human resources to purchase and to implement necessary IT equipment for their frequent measurement system. Further, they would like to implement some kind of performance management system. For this reason it is inevitable to equip SMEs with easily-understandable systems that contain indicators that are not difficult to measure result of business.
Successful businesses have a pro-active leadership that supports sustainable development, sets up a consistent strategy, works effectively together with stakeholders and partners, makes use of resources in an optimal way and focuses on human resources. Next to these factors, the processes, products and services are evaluated.
On the results side, not only classical key results like market share and growth, turnover and profit are evaluated, but also soft factors like the impact of the business processes on its own people, on the customers, and on society. Long-term-focused activities like corporate social responsibility are to be considered as important as shareholder value and other rather short-term-focused factors. According to Serban and Ghenta vii, the EFQM-model is used as a diagnostic model and serves as a basis for an expansion that includes aspects of social and environmental responsibility.
Using this model, the companies learn to evaluate themselves and to measure their own progress for continual further development.
This is difficult to do in prosperous times. It is more difficult to maintain this commitment in a time of rapid technological innovation cycles; rising international competition; fundamentally changing processes; frequent changes in the economic, social, and customer environment; and, last but not least, in a time of financial or economic crisis.
Organizations or companies undertaking CSR measures are voluntary and are until now not standardized as the western countries.
But nowadays, voices are raised for legislation on the EU level that demanding CSR activities onto a mandatory component of business activities. Proponents of this requirement argue that companies play a vital role in society and therefore should contribute to growth in social issues. Opponents to these demands hold that private enterprises and companies should not be held responsible for activities that should primarily be the domain of public agencies and private initiatives.
Therefore the matter of CSR was a voluntary activity in the the past decades but now this shifts from voluntary actions to a mandatory requirement for enterprises to implement a CSR strategy.
Many large Business associations have criticized this prospect, due to an increased load of reporting duties and cost that would exceed the capacities especially of small and SMEs.
(Concluded)
