13 - Strategic Control and performance management Flashcards
Chapter 13 - 6 learning outcomes
- demonstrate how and why control is required in developing strategy
- consider the differences between qualitative and quantitative measures
- demonstrate the difference between organisational efficiency and organisational effectiveness
- consider how the use of metaphor can aid strategic thinking
- challenge the need for analysis, audit, assessment and assurance
- demonstrate how to use a balanced scorecard approach in the development and challenge of appropriate organisational control
2 benefits to recording and reporting on results of the monitoring of strategy
- Aids with analysis
- Acts as audit trail of action if the org and its directors and officers are challenged
What is meant by operational effectiveness?
Does the performance enable the realisation of the organisation’s strategic goals?
What is meant by operational efficiency?
Has the performance made optimal use of the stakeholder recourses in the implementation of the strategic plan?
What is meant by a qualitative measure of performance?
Consideration of performance from the collection and consideration of numerical data (subjective approach)
What is meant by a quantitative measure of performance?
Consideration of performance from the collection and consideration of numerical data (objective approach)
3 questions to ask when deciding how/what to evaluate and measure re. strategy
- Were there certain specific objective or goals that needed to be met?
- Was there a particular manner in which such objectives or goals needed to be met?
- Were there other criteria that the strategy presumed would be delivered?
At the higher level, evaluation of performance is often separated into: (2)
- Financial measures
- Productivity measures
3 examples of financial measures for performance evaluation
- Profitability
- Liquidity
- Wealth
3 examples of productivity measures for performance evaluation
People utilisation
Product quality/performance
Resource utilisation
What would be called an ‘output measure’? (organisational control)
A goal
It is important that goals should be aligned with each other with a clear recognition of mutual impact - example of where goals might be in conflict
Increasing market share and profit may be achieved through reduction in product quality and social responsibility
What would be considered an ‘input measure’? (organisational control)
How effectively stakeholder resources are being used
What does use of the ‘input measure’ of considering how effectively stakeholder resources are being used assume?
That an org derives success through maximising the efficient use of the resources that it is feeding into its transformation process
7 stakeholders and their standard effectiveness criteria
Owners - financial return
Employees - worker satisfaction & pay
Customers - quality of good/service
Creditors - creditworthiness
Community - contribution to community affairs
Suppliers - satisfactory transactions
Government - compliance with laws and regulation
