The Performance and Competitiveness of Romanian Enterprises in the European Economic Area

The Performance and Competitiveness of Romanian Enterprises in the European Economic Area

Rodica Gherghina (The Bucharest University of Economic Studies, Romania), Ioana Duca (Titu Maiorescu University, Romania) and Nicoleta Caragea (Ecological University of Bucharest, Romania)
Copyright: © 2019 |Pages: 16
DOI: 10.4018/978-1-5225-7712-6.ch009

Abstract

The scientific approach of the authors' aims at highlighting the performance of the Romanian enterprises, based on the statistical indicators, and their competitiveness in the national and European economic space. Romanian companies are facing a decline in productivity lately, mainly due to a shortage of qualified workforce. Exodus of the skilled labor force towards the European market has led, most of the time, especially among small and medium enterprises, to reducing their activity, decreasing their productivity, and implicitly, to decreasing the profit rate. In this context, the competitiveness of Romanian companies in the European economic space has dropped considerably. Throughout the research, the authors highlight the economic impact due to the use of an unskilled workforce, which led to a low productivity and a decrease in the performance of the enterprises. The research is the results of the analysis of the statistical data, mainly provided by National Institute of Statistics surveys.
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Literature Review

The changes occurring in the economic environment in the past two decades have made a significant contribution to approaching enterprise performance, thus leading to adjusting numerous theories on the concept of performance to the new economic realities.

In this context, many of the specialists in economics deal with performance by connecting it with the objectives the enterprise aims at and with the level of achieving them, others consider it a measurement of the value created by the enterprise, and others consider performance in terms of productivity and effectiveness of the activity.

Performance at enterprise level is what contributed to improving the cost-value relationship, but not what contributes to decreasing the cost or to increasing the value. In the author’s opinion (Niculescu, 1997), “the enterprise is a high-performer if it is both productive and effective at the same time”.Performance = productivity + effectivenesswhere productivity is the ratio of achieved results to the means employed in obtaining them, and effectiveness is the ratio of achieved results to expected results. Therefore, performance is the achievement of set objectives.

Sometimes, the concept of performance can be mistaken for productivity. Yet, performance is a wider concept which emphasises both the economic and the operational aspects of an economic entity. Moreover, performance takes excellence into account and “incorporates profitability and productivity among other non-cost factors, such as quality, speed, delivery and flexibility” (Tangen, 2005).

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