Methodology for evaluation of industrial corporation management team effectiveness

This article describes existing approaches to determining the efficiency of management teams. The authors’ method for efficiency evaluation for performance of management teams and their members is proposed, based on operative business simulation of corporation divisions. The proposed method uses parameters of the Cobb-Douglas production function. The method allows not only evaluate efficiency of structural subdivisions supervised by top managers, but also compare their efficiency and estimate the contribution of each division to general operational performance of the enterprise. Managerial potential, which is determined in the simulation process, characterizes reserves for management effectiveness growth and can be used in operative planning of the company’s activity in the process of more well-balanced resources allocation. The authors propose to determine the index of division participation interest. This index can be used for top-management activity stimulation by establishing key performance indicators (KPI). The proposed method has graphic representation of division and corporation operating outcome. Approbation of the method for evaluating efficiency of management teams was carried out on the data of “ChTPZ” PJSC for 2014-2017.