Organizational Intelligence Scale for Business Organizations in Chaotic Situations

Organizational Intelligence Scale for Business Organizations in Chaotic Situations

Şefika Şule Erçetin (Hacettepe University, Turkey), Nihan Potas (Gazi University, Turkey) and İlker Koç (Banking Regulation and Supervision Agency, Turkey)
DOI: 10.4018/978-1-5225-0148-0.ch011
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Abstract

One of the key roles of the present era in the management of an organization is intelligence. This influences the management of employees as well as applicability of human capital within the organization at a particular time. The significance of intelligence to both employees and organizations for the smooth operation of the organization cannot be overemphasized. It not only depicts the theoretical bases of intelligence in organizations but it also outlines the practical reflections at workplace. The purpose of this study is to develop a new scale that can be adopted in the evaluation of organizational intelligence based on management and competence in decision-making within firms in as far as trade, industry, finance and services tailored to transformation of companies operating in the business sector is concerned. Equally, a new methodology for testing the consistency of financial data of the companies in relation to this scale will also be introduced.

Key Terms in this Chapter

Performance Indicators: The financial performance indicators also determine the level of intelligence of a firm once effectively studied and this conceptual paper seeks to propose a model that can use financial performance data of a firm to determine its level of intelligence. The key financial performance indicators critical to any business organization are gross profit margin, net profit, net profit margin, aging accounts receivable, current ratio.

Organizational Intelligence: Organizational intelligence, put simply, refers to the capacity of an enterprise to mobilize all of its available brainpower, and to focus that brainpower towards achieving its mission. Organizational intelligence is also a learning process, which includes the development of adaptable behavior using organizational memory, perception whilst it is also defined as the ability of organizations to take decisions about ordinary and extraordinary situations.

Financial Management: Managing financial resources of any organization.

Evaluation: Equally worthy noting are the five steps in the process of intelligence building which include: direction, collection, processing, dissemination as well as continuous review and evaluation.

Financial Ratios: In order to determine the financial success of the firms under study, the first phase of the process will feature determination of the level of financial ratios. Five ratios among those generally accepted in the initial stage will be selected. However, there may be a possibility of increasing the number of rates for specific sectors or companies. Then, a specified weight percentage depending on the importance of each of the selected ratios will be accorded to each ratio. The sum of the weight percentage given to a ratio is equal to 100. In this study, it will be assumed that all ratios are of equal weight and accordingly, a weight of 20% will be given.

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