Research studies

Impact of Institutional Building on the Performance of Business Organizations


Prepared by the researcher   : Dr. Iskandar Hassan Abdel Sattar – Senior Lecturer , Lebanese International University – Aden

Democratic Arab Center

Journal of Afro-Asian Studies : Thirteenth Issue – May 2022

A Periodical International Journal published by the “Democratic Arab Center” Germany – Berlin.

Nationales ISSN-Zentrum für Deutschland
ISSN  2628-6475
Journal of Afro-Asian Studies

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This research aims to display the importance of the institutional building process in all businesses in general. In this research, the descriptive method was used to review a number of components of the concept of institutional building so that the changes required for the development and development of various businesses on a sophisticated scientific basis to ensure access to the achievement of the desired goals can be made. Effectively performing by utilizing the least financial and material resources and showing high quality results in terms of achievements. For the purpose of this research and to evaluate its importance, a random number of employers and employees were interviewed through field visits to find out the extent of the concerned people’s knowledge of the concept and their willingness to accept the idea of ​​the systematic application of the process. Most of those interviewed welcomed the idea and expressed their willingness to accept it.

The research aims to develop a number of issues related to institutional building, where specific goals have been set for application where the meaning of the organization is not understood in isolation from its goals that distinguish it from other organizations, and the formation of goals is the first step that the administration works to choose in line with its capabilities.

The organization’s management must follow up on developments and adapt to them, to bring about continuous development in its inputs, and to improve its processes and outputs to achieve competitive advantage and superiority over the corresponding organizations. It is efficiency and effectiveness together.

In order for the administration to achieve better performance, the organization resorts to a deep understanding of the organization’s environment and analysis of its internal climate, and many organizations seek to determine the ingredients for target performance through monitoring and evaluation of the available opportunities and available resources (physical and human), and in light of the opportunities and resources, the administration develops its appropriate plans that It believes that it will achieve better results, and the organization does not neglect to take into account the components of the internal climate during the planning process due to its importance in the implementation process.  The internal climate includes individuals, jobs, equipment, systems, technology prevailing in the organization, available information, human relations, organizational relationships that define tasks, responsibilities and powers, the formal organizational structure, and then the management method that employs all these capabilities to achieve its goals.

  1. Research Introduction

Globalization concept enforced many issues to be considered so as reflect the modernization work environment needed today to be able to live in this competitive world.

 This document will address the business environment in Yemen and its relationship with the organizations’ institutional building. The development of regulations and rules is an attempt to implement institutional work, which is the first step and its success will continue to depend on the extent of the desire to reduce the disposal of personal influence in decision-making on business performance in different organizations. The correct preparation before implementation, and the management of resistance to change efficiently and effectively.

This study highlights the concept of Institutional building and its impact on the performance of organizations in view of the reality of work organizations today. In the research, the nature of the problems, concerns and challenges facing the process will be identified and how to find ways to develop the performance of different organizations to ensure the implementation of a system that keeps pace with the competition in business projects, especially in infrastructure, modern life, or in the development of information and communication projects, and helps to reach a better follow-up of results.

In this research, a number of issues related to the process of institutional building on the performance of business organizations and the importance of the need for this process will be addressed, which will help those concerned to benefit from it in developing the process of accomplishing tasks in different businesses more effectively and based on high-end scientific foundations to ensure achieving objectives and desired changes for the development of society, including the implementation of development projects with economic feasibility and social impact. The different methods in this field will be listed with the relevant characteristics.

The research also includes in its components the different aspects of the process with a specific analysis for the purpose of benefiting in this research. With this analysis and the other analyses mentioned later, the final results and the desired lessons that will help in applying the institutional building process during the implementation of various projects are finally drawn.

2- The Research Problem

Under the framework of the climate of globalization prevailing in all aspects of work life or the rapid technological development, taking into account the environment of the investment situation in Yemen and the psychology of dealing with the target groups, as well as considering the level of the concept of institutional construction absorbed in the investment environment of projects lies a set of problems in the implementation of the process of institutional building. we list through a set of questions next:

  • To what extent does the investment environment understand the concept of

institutional building in light of the transparency framework available in the project environment, and how can the target community be prepared to accept the idea of ​​this building?

  • How to determine the inputs to be included in the institutional building and what is the executive mechanism to be selected in implementation.
  • What method can be applied to lay the initial foundations to determine where we stand now and where we want to go.
  • What are the best ways that can be followed in order to intervene in this development project.
  • How to document facts to be exploited in making appropriate decisions for the development of institutional work later.

There is a direct relationship between administrative development and the adoption of institutional work. By looking at this and analyzing the cases of many Yemeni organizations, it is noted that the link between institutional building and its impact on the performance of these organizations has not been completed with sufficient attention and arrangement, as most of these organizations suffer from many problems related to institutional building and its formations from various aspects, and These problems are constantly increasing due to local, regional and global variables and stumbling blocks. Also, the adoption of traditional institutional systems that do not keep pace, in which the institutional system is still just names is another reason for the emergence of the problem is considered its policies, regulations and procedures are not enforceable. In addition, there are gaps in the application, which indicates a weakness in the awareness of the importance of the role of institutional building and what this entails on the performance of these organizations present and in the future.

Hence the problem of the study in identifying institutional building and its impact on the performance of organizations and the extent of the link between institutional building processes and the performance of the organization represented in application and development in all its aspects.

3- The Importance of the Research

The institutional building process occupies great importance as it effectively helps in providing a set of control rules to help develop and advance the investment environment and creates an appropriate and solid climate for decision makers to take the right and appropriate decisions and the possibility of fixing deviations in the progress of project implementation before it is too late. The importance of the study is presented in the following:

A- This research is concerned with finding a preliminary ground for the institutional building project and seeks to clarify the impact of the institutional system represented by institutional building on the performance of organizations.

B – It represents a specialized scientific addition in the field of studying the impact of institutional building on the performance of organizations, and thus comes as a contribution to helping decision-makers to develop the institutional building system, whose impact is reflected on performance.

C- It may help those responsible for managing organizations in Yemeni society in general, business organizations in particular, and decision-makers to know the weaknesses in institutional building and work to avoid them, especially as it will seek to choose clear indicators that help in formulating the organization’s visions and objectives in accordance with the specified standards, and in a manner that is consistent with the Yemeni environment.

D – Knowing the impact of institutional building on the performance of organizations in general and business organizations in particular.

4- Research Objectives

This research aims to reach the following objectives:

  • Clarify the direct relationship between business and institutional building in business and investment projects.
  • Providing a clear vision for adopting the concept of institutional building in all investment businesses to achieve the desired change.

–   Identifying the obstacles that could lead to the failure of the implementation of institutional building activities.

–   Identifying the different means and methods that are used to measure the level of success of any administrative process related to institutional building.

  • Knowing the impact of institutional building on the course of the mission,

positively or negatively, so that the decision maker can take the appropriate measures to make the required amendment.

  • Emphasizing the role of workers and organizations themselves in achieving the

 principle of institutional work in the required performance.

  • Highlight the role of strategic planning in the performance of the required projects.

– Establishing a mechanism for how to create a clear methodology for raising awareness about the importance of acquiring the concept of institutional building in business and development projects.

-Emphasizing the role of the organizations supervising projects in adopting the institutional building methodology as a binding basis for implementation in all projects.

5- Research Methodology

Due to the novelty of this field, especially at the level of project implementation in Yemen, in particular, and as a prelude to the idea of ​​institutional building and contributing to the dissemination of the concept on a wider framework, it has relied in this research on the descriptive approach, which presents the details and terminology. It also relied on the presentation of evidence and indicators supporting the acceptance of the idea of ​​relying on institutional building as a source to ensure proper application during the various stages of implementation.

6- Research Hypotheses

In the spirit of the concept of institutional building and the investment climate for organizations and the restructuring of the organizational structure in Yemen and in response to the objectives and implementation of this research and according to the awareness-raising concept of the subject among employers and workers in the areas of business implementation, we mention the research hypotheses in the following points:

The First Hypothesis:

There is no clear vision in the practical application of the concept of research among employers or workers in the various stages of the life cycle of the organization, as it requires intensifying awareness of the concept of institutional building and clarifying the importance of the process for the success of the mission results

The Second Hypothesis:

There are no clear indications for employers, workers or specialists in the concept of institutional building and how to acquire appropriate ideas to ensure that the target results are reached during the implementation of the work. Thus, it is required to build the capacities of those in charge of work, starting from the top management in the functional hierarchy, to the operational / lower management, on how to prepare or choose the appropriate concepts from institutional building for the purpose of applying them in their various organizations.

The Third Hypothesis:

There is no well-established information base in general that can be used as a reference for the process of institutional building in Yemen, and there are no houses of expertise in this field in particular in the local environment. The lack of this component in the local environment has a negative humiliation that supports the development of institutional building at the local level.

7- Terms Used in this Research:

Institutional Building:

It means the stage at which the organization begins to take aggressive steps for the process of establishing, building and structuring in a way that responds to the requirements of the future vision, the mission entrusted and the goals set in accordance with the strategies adopted by the organization.

In other words, it is the stage in which the organization begins by choosing the most appropriate organizational and administrative structures, determines the systems, regulations, policies and procedures, and adopts rules to control the pace of its work internally and externally. Practical strategies and tactics for the purpose of development, expansion and extension.


It means the completion of the work as it should achieve the extent to which the individual or the group within the same organization achieves the desired goals effectively and as desired by using the available resources with high efficiency and effectiveness.


The organization is a structure of multiple roles within the framework of the formal entities, which are socio-economic units that include a set of material and human capabilities, in which coordination is made among them in order to reach the achievement of certain goals agreed upon by the related stakeholders (beneficiaries).

Institutional Performance:

Institutional performance is defined as the integrated system for the results of the organization’s work in the light of its interaction with the elements of its internal and external environment, and it is a reflection of the organization’s ability to achieve goals. In other words, it is the ability and efficiency of organizations to implement their strategic goals in accordance with comprehensive quality standards and to enable them to face competitive forces.


It is a process of inspection, observation or continuous follow-up of a project being accomplished to know the extent to which the results obtained match the determinants at the beginning of the task (known as indicators). It is also through this process to test the extent of optimal use of resources, the results obtained, the extent to which the various components contribute to reaching the results


It is a process of inspection, observation or follow-up that is carried out periodically between specific periods to see the extent to which the results match the plans based on predetermined determinants (known as indicators) and the results obtained appear (negative or positive) based on a number of factors affecting the implementation.


They are specific values ​​in the form of ratios, rates, or descriptive cases that are determined at the beginning of the task and are used during the implementation phase of the task or at the end of it or according to a certain periodicity to give a picture of the existing situation or to clarify the effects of a task / project on reality (administrative / economic / social. ..etc.)


Are those changes that occur in the target environment during or at the end of the implementation of certain interventions, known as grace period. For example, the ease of administrative or financial transactions that were implemented or improved in the performance of an individual or a certain department in the organization … etc.

7- Justifications for the Research:

1- The field of specialization in institutional building imposes on the necessity of studying such new topics that benefit the financial and business community.

2- The urgent need to list the shortcomings in the business environment that affect the growth of institutional work.

3- The subject of the study is one of the topics that seek to reach useful results to find solutions to the problems related to the issue of institutional building in practical life, especially since the world is changing rapidly today.

4- The necessity of presenting the concept of introducing modern methods in institutions, and identifying the effectiveness of institutional building with all its components and requirements.

5- Possibility to contribute to providing ideas and solutions that help the business environment to develop institutional building and to ensure effective implementation and performance.

8- Components of Research

In this part of the research, we try to list a set of details of the subject in terms of analyzes and to show the reasons that lead to the shortcomings in institutional work in the various organizations in Yemen. We list these things as follows:

First: The Concept and Essence of Institutional Building:

The addressing of the concept and importance of institutional building and the important elements and qualities in starting the process of institutional building and the advantages achieved by business organizations in light of their adoption of this approach. This is based on strong pillars and is characterized by characteristics and features that lead these organizations to success. It also requires starting to take serious steps for the establishment and construction process in a way that responds to the requirements of the future vision, the mission entrusted and the goals set in accordance with the strategies presented, so that the selection of the most appropriate organizational and administrative structures is initiated. It defines the systems, regulations, policies and procedures, and adopts rules to control the pace of its work, internally and externally. Practical plans for development and expansion.

The work is transferred from the solitary environment to the collective environment (Team Environment) and the shift from ambiguity in the concept of performance to clarity, and from limited resources to multi-resources, and from limited impact to the broader or broad impact. The realization of the principle of one team and cooperation in achieving integrative work has a significant impact on the transition to institutional building.

Second: Objectivity and Impartiality in Decision-Making:

Adopting objectivity, by setting specific criteria, and objective decisions, and pushing work towards employing all human efforts, and benefiting from various productive capabilities to ensure continuity of work. Note that a positive approach to the concept of globalization and Benefiting from the achievements of contemporary thoughts will be a good base for laying the foundations and general principles of the organization. Neutrality in decision-making has a great impact on the success of the process in terms of the organization’s ability to take its decisions without external interference, achieve its goals, overcome difficulties, and attract a number of Attracting the Qualified.

Third: Qualities and Attributes Required for the Job:

Provides the most required qualities such as openness, maturity, determination and positive thinking, and the necessary managerial and supervisory skills. It will have a significant impact on the maturation of the idea of ​​institutional building in the organization. The process of demonstrating the legitimacy of the organization, obtaining the legal license to start work according to the conditions and having a qualified, capable, enthusiastic and dedicated leadership for this work will provide an added value to the institutional building process. Availability of sufficient capital, from self-financing and diversified sources on an ongoing basis, is necessary with the existence of an accurate financial and accounting system.

There are also a number of features that are required to be available in the organization for the purpose of development and growth, including the objectives and mechanism of the development of the organization, keeping pace with updates to renew the system, relying on the principle of integrative development in all aspects of work in the organization, effective application of the concept of business ethics and attention to the human resource in the organization, by considering the employee as an internal customer of the organization and requires attention to it in order for the employee to reflect that on the external customer.

Fourth: Transparency and Capacity Building:

Transparency in implementing the concept is reflected in the existence of specific, clear and agreed-upon work and regulations, which is documented, written and known to all concerned and dealing with it, and is consistent with the objectives of the organization. The existence of specific, clear, studied, agreed, documented, written and known plans and programs to the concerned parties that will deal with them constitutes another aspect of the success of the institutional building process of the organization.

The adoption of a capacity-building strategy through educational curricula for development and attention to training and learning through experience or special programs for this helps achieve the required professional growth for its employees and invest this education in the development and advancement of the organization, as well as avoiding resistance to change desired. The use of external expertise, whether local or international, has a significant impact on the development of the principle of institutional building in the organization.

The philosophy of institutional building depends on cooperation between individuals and the tendency to accept cooperation with others and the acceptance of others. The philosophy also relies on a number of basic components of institutional building and includes in its base clear goals and strategies, an integrated organizational structure, a sound organizational culture that reflects the cultural reality of the environment, reliance on highly efficient and effective human resources, effective administrative leaders, appropriate systems and methods of work, relying on Technology and environmental influences.

8- Results and Recommendations

Due to the novelty of this topic in the Yemen, this research has been completed on initial basis, and it is necessary to adopt the idea later and search in more depth by researchers to develop the topic and show greater benefit for workers and the related stakeholders in this vital and modern field in the business and investment environment in Yemen. While carrying out this task, it was noticed that the decision-makers had a great shortcoming in understanding the importance of the subject. Accordingly, the process of continuous communication and successive awareness on the subject of institutional building will be considered as essential.

This topic will certainly help to narrow the current gap that exists between specialists in this field and decision makers in the implementation of projects or businesses.

It can be said here that institutional building, and the consolidation of institutional thought, will not be achieved unless there are convictions stemming from an intellectual depth of the importance of institutional building, knowledge of the role of the individual in the organization, and the relationship of the individual with the organization, so that individual does not remain in control of the organization and its activity. In other words, a participative management style is adopted, that can help to change Organizational Culture.

Through this, the leaders of organizations must rise to the level of responsibility that they put themselves in and choose this path, because institutional building is only suitable for people who have self-standards and moral specifications. The tangible success in institutional building for various organizations reflect on all efforts despite the difficulties and obstacles it faces.

In order for institutional building to continue to achieve greater successes, and in order to keep pace with local, regional and global changes, modern administrative systems must be adopted, working in a team spirit, and educated organizations, operating on the principle of learning from their experiences and from the experiences of leading organizations, and based on managers and workers who have motivation Self-learning, acquiring knowledge and building on it, and ready to shift from management by command to participative management, and to adopt the principle of creativity and innovation in business.

 The interest is essential in selecting the organization’s leadership and qualified employees who possess clarity in strategic visions, and have sufficient ability to analyze the factors affecting the performance of the organization, organize rights and duties, write the necessary policies, develop evidence, procedures and work rules with clarity of budgets.

We can also say that the main objective of the management’s presence in any organization is to ensure the achievement of the goals for which the organization was established, and this requires the management to carry out appropriate activities that are appropriate to achieving the goals so that the performance management process depends on direct communication between the administrative levels to set goals and standards, and monitor the performance of the organization. It is also necessary carrying out a continuous evaluation process with the aim of achieving profit and productivity. From this context it is clear that institutional building is the process through which the employer makes sure that his employees are directed towards achieving the institutional goals, which is also an integrated approach directed towards guiding, training, evaluating and motivating employee’s effective performance.

The recommendations of the research are considered among the important elements in the content of this research, and tries through them to develop a set of solutions to solve the problem or shortcomings in this field. Among these recommendations:

– The participation of specialists in this field in relevant meetings to clarify the importance of the concept of institutional building in business management.

– Ongoing awareness at all levels to show the importance of the field at all relevant frameworks and levels working with this field, whether from employers or employees.

– The inclusion of a main clause in all labor legislation, its implementation mechanism, and the strictness of compliance with it through continuous follow-up of the executed works.

  • Inclusion of the content and concept of institutional building in all educational curricula related to business management or implementation.

9- References and Sources

1- Francois, Leroux, (Introduction a 1 economie de 1entereprise Gacton morin Quebec), 2end, 1980, P142.

2-Harrison, Roger, (Diagnosing Organizational Culture), San Diego,Pfeiffer & Company, 1992.

3- Wayne F. Cascio, (Managing Human Resources), Mc Graw- Hill Inc, New York, 1992, P.S.

4-Kaufman, Roger; Browne, Hugh, Oakley; Watkins, Ryan, (“StrategicPlanning for Success: Aligning People, Performance, and Pay Offs”), Pfeiffe,(2003).

5- Amin Abdul Aziz Hussein, “Business Administration and the Challenges of the Twenty-first Century”, Dar Qubaa for Printing, Publishing and Distribution, Medina, Saudi Arabia, 2003 AD.

6- David Wilson, “The Strategy for Change”, Cairo, Dar Al-Fajr for Publishing and Distribution, 1999.

7- Suleiman bin Ali Al-Ali, “Development of human and financial resources in organizations”, published by Al-Amanah Foundation, Beltsville – America, 1416 AH-1996 AD.

8- Taher Mohsen Al-Ghalbi, Wael Muhammad Idris, “Strategic Management”, Wael Publishing House, Amman, Jordan, 2007.

9- Abdel-Fattah Muhammad Al-Maghrabi, “Strategic management to meet the challenges of the twenty-first century”, Al-Asriya Library for Publishing and Distribution, Morocco, 2013 AD.

10- Ali Al-Sharqawi, “Business Administration, Functions and Administrative Practices”, Beirut, Dar Al-Nahda Al-Arabiya, 1988.

11- Falah Hassan Aday Al-Hussein, “Strategic Management, Its Concepts, Contemporary Entrances and Operations”, 1st Edition, Wael Publishing House, Baghdad, Iraq, 2000 AD.

12- Muhammad Akram Al-Adlouni, “Institutional Work”, 1st Edition, Ibn Hazm House for Printing, Publishing and Distribution, Beirut, Lebanon, 2002 AD.

13- Muhammad Ali Al-Douri, “Institutional Performance”, Zahran House, Jordan, 2007 AD.

14- Musa Al-Lawzi, “Organizational Development: Basics and Modern Concepts”, Wael Publishing House, 1- Muayad Saeed Salem, “Organization Theory: Structure and Organization”, Dar Wael for Printing and Publishing, Amman, 2000 AD.

15- Hani Al-Taweel, “Organizational Behavior, Individuals and Groups Behavior in Systems”, 3rd Edition, Wael Publishing House, Amman, 2001.

16- Hisham Al-Talib, “Human Development Guide”, Dar Wael for Publishing and Distribution, Jordan, Amman, 2003 AD.2nd Edition, Amman, Jordan, 2003 AD.

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