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Organization, Strategic Organization Article, business management strategy
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Article at a glance:

The link between profits and organizational performance

  • Initiatives to address “soft” management issues—such as talent, culture, and values—may have a direct financial payoff, McKinsey research shows.
  • An analysis of hundreds of global companies has identified a strong correlation between organizational and financial performance.
  • There seems to be an especially strong link between the bottom line and efforts to invest in skills, improve reporting relationships, increase the flow of ideas, and measure performance and risk.
This article contains the following exhibits:
  • Exhibit 1: Nine key areas underpin organizational excellence.
  • Exhibit 2: Companies ranked in the top quartile for overall organizational quality were more than twice as likely as those in the bottom quartile to have above-average margins for their industry.

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