Analysing Non-financial Performance Flashcards
What are some non-financial measures of analysing a businesses financial performance?
- customer attitude surveys
- employee attitude surveys
- market share
- productivity
- environmental record
How can customer attitude surveys be used to evaluate performance?
They can be undertaken either through quantitative or qualitative methods to assess the views of customers on a range or issues such as product quality or customer service. The aim is to allow a business to consider its strengths and weaknesses and to look at ways of better meeting customer expectations.
How can qualitative research in customer attitude surveys help a business in evaluating its performance?
E.g focus groups, aim to gain the opinions, beliefs and intentions of those surveyed, e.g. by asking why a particular customer decided to buy less or more of a product
How can quantitative research in customer attitude surveys help a business in evaluating its performance?
Looks at larger groups of people and asks questions such as how often they purchased a product. This can be done through online or postal surveys
What do kind of information do employee attitude surveys collect?
These surveys can look at staff satisfaction on a range of issues such as their role, their pay and their manager and senior manager. They can also assess their training and development needs, the environment they work in, and their perceived career prospects.
How can market share be used to evaluate performance?
A business can use a model based on market share such as the Boston matrix, to assess what might be the best strategy for its product- such as investing in more marketing or creating an extension strategy. Market share can be monitored so assess the success of the strategy.
Why might measuring productivity be important to a business?
Productivity affects the costs of a business- if staff are more efficient, the unit costs are lower and the business is more likely to be profitable. Comparing productivity levels can help a business to identify problems and address them before they have significant impact on costs and so they can remain competitive.
How do employee attitude surveys help businesses?
- assess the effectiveness of its policies and performance
- identify low morale and how this might be addressed
- Facilitate change e.g lowering pay or raising targets
What is a businesses environmental record?
The impact its operations and activities have on the wider world
An example of a business that has a good environmental record
Amazon - recycled packaging, energy, efficient equipment, obtains electricity from renewable sources such as wind power
An example of a law that businesses have to abide by related to environmental record
Under EU law, car manufacturers are responsible for recycling every old car manufactured
What is greenwashing?
When businesses advertise their ‘green’ credentials but actually practice little in terms of their impact on the environment.
