Exploring corporate performance

The ever increasing uncertainty of the modern business environment and the futility of forecasting its long-term future with any accuracy, has necessitated that companies respond to outside influences more quickly and vigorously than ever before. This is a serious challenge to any manager's ability and one that requires a clear and full understanding of how a business reacts to its complex environment. Unfortunately, although financial models (simple ‘definitional’ models based on accounting relationships) have provided some support for business planning and decision making, they are not particularly useful for strategic planning because of their inherent reductionism and financial bias. What is needed is a holistic approach to business modelling which can only be provided by a model of the organisation as a whole – a ‘corporate’ model. The application of soft systems techniques can ensure that all of the factors influencing business performance are identified and hence provide a rich understanding of the business and its environment. Such analysis can sometimes be sufficient in its own right for strategic management purposes or, if appropriate, form the specification for subsequent development of corporate models that are likely to be far richer and more reliable than could have been achieved without the preliminary work. The case study described here shows how this process was achieved at West Midlands Passenger Transport Executive.