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Productivity strategy led power utilities

Joseph Nthikeng Letsoalo (Department of Finance, Eskom, Johannesburg, South Africa)

International Journal of Productivity and Performance Management

ISSN: 1741-0401

Article publication date: 4 November 2014

Abstract

Purpose

The purpose of this paper is to return to a long-term business focus that uses Productivity Accounting methodology as a strategy tool for business operation and for making investments to benefit all producers and consumers in the electricity markets.

Design/methodology/approach

The research subjected the published annual financial reports data to an analysis using the Productivity Accounting methodology to fathom productivity and price recovery with a focus on productivity changes over the year. Assessment is made of any comments on productivity or efficiency by the utilities in relation to the computed productivity from the methodology of analysis.

Findings

The financial data as well as the statistical data that went with it could be analysed independently and productivity and price recovery results obtained. It is possible use Productivity Accounting to measure productivity change and use it for influencing investment and operational productivity for each resource and the utility.

Research limitations/implications

The focus is on power utilities that are experiencing shifts in the way they do business in the environment. However, there is definitely value in using productivity as a strategy for sustainable utilities. It would seem the results may be applicable to other types of businesses.

Practical implications

It is possible for any utility to use Productivity Accounting as a strategic tool to run the operations and support that with continuous investments as a basis of productivity driven sustainable and profitable businesses. It highlights the faults of the booms and bust of the California power industry against a productivity strategy-led utility.

Social implications

For both developing and developed countries it would mean that electricity is affordable in the long term as it is not a luxury good. Electricity can be used to leverage economies of countries for competitiveness.

Originality/value

The paper provides a fresh look at productivity as a strategic focus of a sustained business performance, for all utilities based on their own unchanged data.

Keywords

Citation

Nthikeng Letsoalo, J. (2014), "Productivity strategy led power utilities", International Journal of Productivity and Performance Management, Vol. 63 No. 8, pp. 1091-1097. https://doi.org/10.1108/IJPPM-11-2013-0183

Publisher

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Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited