Theoretical approach to a lower limit of KPIs for controlling complex organisational systems

Eber Wolfgang ()
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Eber Wolfgang: Chair of Construction Management, Technische Universitat Munchen Munich, Munich, GERMANY

Organization, Technology and Management in Construction, 2023, vol. 15, issue 1, 169-177

Abstract: The organisation of projects is commonly understood as a highly complex system that is to be developed from standardised processes serving a unique goal to be reliably achieved at the first attempt. The system’s development on the time axis determines a significant part of the quality of an organisation since the characteristic behaviour represents the system’s ability to follow a stable and predictable path through the space of states. Due to the well-acknowledged complexity of the system, the available options at each branching point are numerous, and the project’s success is not so much determined by a single decision as by the entirety of the complete decision path from the first incomplete model to the final goal. In particular, in the fields of construction and real estate management, the acceptable corridors of deviation are fairly narrow because the technical and the legal/economical margins are low, dictated by the tight markets. In order to keep the naturally given strongly varying development under control, generally, key performance indicators (KPIs) are defined, intended to unambiguously reflect the current overall behaviour of the system, to allow judging of the situation and to serve as a solid basis to initiate measures to control the development. This paper investigates the structure and the required minimal set of KPIs safely covering the development of a complex system on a system-theoretical basis. Against this background, we propose a certain abstract set of KPIs, in addition to pointing out the methods useful to identify these.

Keywords: controlling; Systems Theory; KPI; construction management; real estate management; complexity (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:otamic:v:15:y:2023:i:1:p:169-177:n:6

DOI: 10.2478/otmcj-2023-0012

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