Rethinking Internal Firm Organization

What makes your firm stand out as a top-performer in today’s fast-paced business world? How does a firm achieve and keep that status? How is the value of innovation, smart investment, enhanced productivity and expansion increased through proper management of any firm’s greatest asset – its human capital?

PPSE experience and research show that for SMEs to grow with their feet planted strongly on solid foundation, it is critical that they apply internal firm organization and good corporate governance practices. Embedding modern practices of governance principles in the SMEs’ structures and practices is key to their expansion and creation of new employment opportunities.

Improvement of firms’ internal organization promotes the system of merit in recruitment and promotion, resulting with a more efficient and diverse human capital as well as higher involvement of youth and women in the private sector. It enhances accountability, transparency and compliance. It builds trust, confidence, fairness and accountability not just among shareholders but also among society-wide stakeholders. So, this process becomes a type of blueprint for the economic and societal development.

 

PPSE applies Market System Development (MSD) approach, aiming to introduce and promote innovative products and services through actors of change that apply inclusive, scalable and sustainable business models. We first test grounds by supporting private sector actors to pilot innovative services and products and then promote success stories so more SMEs and relevant actors access and make use of such products and services, thus influencing behavioral and systemic change.

One of the PPSE interventions in private sector development and governance was to support Kosovo SMEs, mainly in the food processing and tourism sectors, on improving their internal organization in order to take the leap into their next level of firm performance and expansion. Through partnership with Recura, a program tailored to each SMEs’ needs was designed. The program consisted of training in internal firm organization and corporate governance delivered to CEOs, owners and managers, followed by in-house coaching and corporate governance reviews.

The program now can serve as a reference and framework for in-depth understanding and practicing of good corporate governance and better internal firm organization. Good internal organization practices help companies to progress towards achievement of their goals; assist them in attracting investment and improving its operations, functions and performance; as well as support companies to improve the integration into wider business-networks and markets. The effects of this program go beyond the sessions that were held. SMEs that were part of the program progressively apply good internal organization practices while the demand for such services is gradually increasing.

Some Expected Benefits from the Program:

  • Improved performance, competitiveness, profitability, and long-term value
  • Improved human capital diversity and productivity
  • Improved decision-making processes
  • Defined and implemented corporate strategy, and direction
  • Establishment of clear roles, responsibilities, and accountability
  • Enhanced substance and structures of internal control
  • Build reputation and trust through strengthening of stakeholder relationship