Why Do Organisations Underperform

All businesses exist to be profitable or to provide a product or service that people need. In providing that product or service, it is expected that it will be done in a profitable manner, with the exception of not-for-profit organizations.

This book looks at several reasons why an organization fails to perform. The reasons range from simple things to other more complex matters. A failing organization does not do well for the economy or its employees. It is highly expected that after persons read this book, they would gain an understanding of the reasons for organizational failure, and then make efforts to protect their organizations from falling into this trap.

The chapters have been carefully allocated, which will provide a smooth flow of the reasons why organizations fail. There are four sections in this literature that provide many of the challenges that are facing organizations; solutions are also provided in the same chapter.

• • People Factor – In this section, many of the issues that affect human capital are discussed. Before employing people, there is a need for background checks. Training is an area that many organizations often neglect, leading the organization to underperform. Some organizations do not have a succession plan. When an experienced employee leaves, there are many difficulties that may arise. Someone with strong leadership skills can be the difference between the growth or decline of an organization.

• • Technology Factor – In this section, you will learn how information technology (IT) can contribute to an organization’s growth. Software applications can help an organization to reduce its operational costs and to increase its output. Communication should never be avoided, whether in a small or a large organization.

• • Operational Factor – The organization can plan as much as it wants, but if it does not execute its plans, then it is destined to fail. There are many tools, machinery and equipment that an organization will need in order for it to be successful. There is always the need to upgrade the tools of an organization. All departments of the organization must be properly coordinated, so as to achieve the desired results. Marketing can also help to increase the revenue of the organization. Double loop feedback is critical since management can use this information to strengthen the organization’s performance.

• Finance, Accounting and Auditing Factor – While this is the last section, it is not by any means the least important section. An organization must be able to account for all its financial activities since a lack of financial prudence will contribute toward the organization’s success or failure. Policies and procedures must be established and enforced, so that good governance will be adhered to. If the organization makes an investment, then it may become competitive in the market. All the organization’s activities, whether financial or non-financial must be audited by qualified persons.