Very little empirical evidence supported the belief that business and economic practices affect organizational failure, success, and financial performance. Previous works on the measurement of high performance business and economic practices concentrated efforts on individual practices, excluding overall business and economic practices. Available empirical works have largely concluded that the dimensions of business and economic and a firm’s balanced effectiveness were under researched, and that the macro-examination or sociology of organization was neglected or ignored. These empirical works, that have examined singular factors and that have no coherent theoretical framework for explanatory variables, have failed to cope and embrace rapid change and innovation, which have dramatically reduced profits and sales growth. These lack of business management practices, policies, and processes have threatened crisis, and have derailed firms’ effectiveness.
Lack of a powerful combination of good ideas, good employees, and good management are severely testing organizations. Many of the largest and best known companies have fallen.
There is globalization and intense technological changes, international competition and currency risks, and cultural differences and governments hostile disturbances as well as economic ups and downs over the last decade.
Which specific changes to the existing practices should an organization pursue in order to attract and achieve both strategic and financial performance? Or should we improve the prospects for growing a high performance organization via combination, adoption, and implementation of organizational structure (design and control), leadership (motivation and culture management), and strategy (strategic analysis and choice)?
We believe that business and economic policies and practices provide direct and significant contribution to firm performance.
More effective systems of business and economic practices serve as tools used by firms to coordinate their actions and to achieve desired goals and value for effective functioning of an organization. These practices and policies integrate the most recent thinking about business and economic practices with classical and traditional ideas and theories in practical real world setting, and add and expand significant features by providing knowledge base to make organizations more effective.
Although it has generated a great deal of conceptualizing, business and economic practices are just beginning to occasion systematic empirical investigation. So, there is the need to advance and test it for its performance implications in different competitive environments.
Available empirical work has largely concentrated its attention and effort on individual business management practices to the exclusion of overall business management systems, their primary subunits, and organizational effectiveness with overall organizational ability to adapt and achieve their goals. Moreover, various scholars have recently emphasized that the dimension of business and economic theory and firm performance is under researched.