The effect of institutionalization on business performance and productivity (furniture and panel factories case in Turkey)

Institutionalization is necessary in corporations to prevent economic, financial, legal, administrative, and technical chaos and to remove uncertainties, develop a permanent corporate culture, and thus improve performance. In the institutionalization process, a new organizational structure is formed in corporations. The duties, powers, and responsibilities of all the people taking part in this structure are specified in writing. The measurement of the concept of performance, which can be defined as the qualitative or quantitative determination of the output produced at the end of an intended and planned activity, is the most supporting tool in conducting the control function in business management. The concept of productivity, an indication of how effective businesses use their sources, is one of the most significant concepts to be taken into consideration by businesses. This study, which investigates the effects of institutionalization in business on business performance and productivity, was carried out in businesses producing furniture and panel. In the study, a total of 493 businesses, 462 in furniture and 31 in panel business, were reached in 35 different cities out of a total of 2622 businesses with 10 and more employees, of which 2585 were in furniture and 37 in panel business. A questionnaire was used as the data collection tool. The questionnaire form developed by using studies in the literature consisted of three different parts and 86 items. At the end of the statistical assessments, it was determined that institutionalization positively contributed to the performance and productivity of businesses. It was found that businesses that aimed to be better at performance and productivity should pay attention to the "transparency and responsibility", "consistency" and "formalization" subdimensions of institutionalization. According to the main results obtained, it is suggested that businesses that want to institutionalize be consistent so that they give similar responses in similar situations. It should not be forgotten that it is necessary for institutionalization that all duties, powers, and responsibilities be specified and known by employees in businesses. A sound "management-organization" system should be established in businesses desiring to institutionalize and achieve higher performance and productivity.