Measuring organizational performance and organizational excellence of SMEs – Part 1: a conceptual framework

Purpose – The purpose of this paper is to propose a conceptual framework for measuring organizational performance and organizational excellence, which could be used by small and medium enterprises. Design/methodology/approach – Altogether, seven variables are proposed in the overall and work unit level for measuring organizational performance and organizational excellence. The proposed model for evaluating organizational performance and organizational excellence was taken through a round of pre‐testing using relevant statistical analyses, in order to validate the hypothesized relationships. Findings – Excellence is redefined as the ability or capacity of one performance variable to affect or influence the other performance variables in an organization. Total correlation is suggested for measuring different excellences and equations are suggested for calculating overall organizational performance and overall organizational excellence. Practical implications – The model developed for measuring performance and excellence can be used by small and medium enterprises to evaluate their performance and excellence periodically. Originality/value – The definition and model developed for measuring excellence can contribute significantly to existing literature on excellence measurement. Further research can help in adding more variables to this measure to make the model a holistic one.