3.7.3

Question 1

marketing measure of performance financially

Answer 1

Product information - this may include future sales forecasts, product portfolio analysis and details on market share
Market research data - this may include customer opinions such as brand recognition and satisfaction levels

Question 2

Human Resources performance measure financially

Answer 2

Labour turnover, retention and
absenteeism - may give an indication of employee happiness / motivation and the effectiveness of recruitment
Unit labour costs - calculates labour costs relative to output

Question 3

operations measure performance financially

Answer 3

Quality - a business may use factors such as customer repeat purchases, product defects or satisfaction levels
Productivity - including single productivity measures such as labour productivity and capital productivity or multi-factor productivity
Capacity utilisation - maximum output relative to existing output - a key measure of efficiency

Question 4

what are core competencies

Answer 4

the unique abilities that a business possesses that provide it with a competitive advantage.

Question 5

benefits of core competencies

Answer 5

Core competencies give a business uniqueness.
Core competencies add value to a business’s product.
Core competencies are difficult for competitors to imitate.
Core competencies allow a business to enter a variety of markets.
By focusing on its core competencies a business will develop key efficiencies.
Aspects of a business that are not a core competence could be outsourced to a third party so the business can focus on its strengths

Question 6

criticisms of core competencies

Answer 6

As markets and environments evolve, businesses must be able to develop new skills
and strengths - they cannot rely on core competencies.
product.
Outsourcing areas of the business can lead to a fragmented workforce.
Core competencies take time to develop and nurture - not all businesses have core competencies or they might not have the right ones

Question 7

Some businesses might be criticised for focusing their attention on short-term
measures such as profitability and productivity. what are the short term measures of performance

Answer 7

cash position
* revenue
* productivity
* profit.

Question 8

long term measures of performance

Answer 8

R+D
profit quality
employee engagement
sustainability

Question 9

R+D

Answer 9

investment in R+D might give an indication of the likely impact of product development and innovation in the future. However, there is no direct link between R+D spending and the level of innovation within a business.

Question 10

profit quality

Answer 10

firms may choose to focus on profits that they believe they will be able to sustain in the future. Net profit does not always give a good indication of this where exceptional items are included.

Question 11

employee engagement

Answer 11

high levels of employee engagement are likely to return rewards in the future and lead to greater levels of productivity and innovation.

Question 12

sustainability

Answer 12

a sustainable approach to business is one that can be conducted in the long term. A business can measure its sustainability through a Corporate Social Responsibility audit or report.

Question 13

what is Kaplan and Nortons balanced scorecard

Answer 13

This is a planning and management tool used to match a business’s
activities to its vision and strategy. It aims to improve internal and external communications, and monitor organisation performance
against strategic goals.

Question 14

what are the vision and strategy

Answer 14

1. financial - succeed financially appear to shareholders
2. internal business processes - satisfy shareholders and customers
3. learning and growth - achieve vision sustain ability to change and improve
4. customer - appear to customers to achieve mission

Question 15

financial

Answer 15

revenues
profits
* ROCE
* cash flow (working capital)

Question 16

internal business processes

Answer 16

productivity
* quality
* efficiency

Question 17

learning and growth

Answer 17

effectiveness of training
* employee engagement
* R&D investment
* number of new products developed

Question 18

customer

Answer 18

customer loyalty
* satisfaction levels
* meeting customer needs

Question 19

elkingtons triple bottom line

Answer 19

people - social performance
planet - environmental performance
profit - economic performance

Question 20

profit

Answer 20

• monitoring the financial performance over time
• this might typically involve using information from financial accounts and financial ratios

Question 21

people

Answer 21

• measures how socially responsible the business is to all involved
• measures might include health and safety figures, fair pay, fair trade and customer satisfaction

Question 22

planet

Answer 22

• covers the impact the business has on the environment
• this will include reducing carbon emissions, waste and use of non-renewable sources of energy

Question 23

value of Kaplan and Elkington

Answer 23

consider all stakeholders and not just the shareholders/owners of the business. For this reason they encourage businesses to approach internal analysis of performance from a long-term perspective, considering the impact they have on the community, environment and economy.