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BST > Chapter 12 > Flashcards

Chapter 12 Flashcards

1
Q

Model for evaluating strategies

A

SUITABILITY
ACCEPTABILITY
FEASABILITY

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2
Q

What is suitability

A

must fit operational circumstances and strategic position

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3
Q

When is a strategy suitable - how to determine

A

SWOT
Satisfy goals
fill gap
maintain competitive advantage

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4
Q

What is feasibility

A

Can the strategy actually be implemented

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5
Q

Elements of feasibility

A

Sufficient money
sufficient ability
competitor responses,
technology, materials and resource
time to implement
timeframe of results

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6
Q

Strategies that do not make use of existing competences and call for new competences may not be

A

feasible

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7
Q

What is acceptability

A

relates to people’s expectations and expected performance outcomes

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8
Q

Acceptability elements

A

Risk and Return
Financial
Customers
Bsnks
Government
Ethics and corporate responsibility

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9
Q

What are steps in formal system of strategic control

A
  1. Strategy review
  2. identify milestones of performance
  3. set target achievement levels
  4. formal monitoring
  5. reward
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10
Q

What is a budget

A

plan expressed in financial terms

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11
Q

What does the mission set

A

overall direction

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12
Q

What do strategic objectives illustrate

A

how mission will be achieved

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13
Q

What do strategic plans show

A

how objectives will be pursued

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14
Q

What do budgets represent

A

short term plans and targets to fulfil strategic objectives

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15
Q

five benefits of budgeting

A

promotes forward thinking
helps coordinate various aspects of org
motivates performance
basis for system of control
system of authorisation

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16
Q

Issues with budgeting (4)

A

demotivate if unattainable
slack may be built in to be achievable
focus on short term results rather than causes
unrealistic budgets may cause bad decisions

17
Q

Common features of effective budgetary control

A

Tone from the top
accountability
targets achievable
established data collection analysis and reporting
targeted reporting
short reporting periods
timely reporting
provoke actions

18
Q

Characterisitcs of strategic control systems can be measured on two axes

A

how formal is the process
how many milestones are identified for review

19
Q

Guidelines for degree for a strategic control system

A

linkages
diversity
criticality
change
competitive advantage

20
Q

Three different ways of measuring performance

A

financial performance
resource use
competitive advantage

21
Q

Measuring resource use

A

effectiveness
economy
efficiency

22
Q

How to measure competitive advantage

A

identify CSF and measuring achievement via KPI

23
Q

Economy definition

A

measure of actual inputs used

24
Q

Efficiency definition

A

considers relationship between outputs and inputs

25
Q

Effectiveness definition

A

Measure of impact achieved, considers outputs in relation to objectives and the extent to which the processes used by the business deliver the right results

26
Q

Desirable features of strategic performance measures

A

focus attention on LOT
identify and communicate drivers of success
support organisational learning
provide basis for reward

27
Q

good strategic performance measures

A

measurable
meaningful
defined by the strategy and relevant to it
consistently measured
re evaluated regularly
acceptable

28
Q

Ways for measuring divisional performance

A

ROCE and RI

29
Q

ROCE should be

A

greater than cost of capital to provide suitable return to investors

30
Q

Benefits of ROCE

A

Lead to desired group ROCE
Enables comparisons
readily understood
easy to calculate (inputs already calculated)

31
Q

RI calcultaion

A

divisional profit - net assets * required rate

32
Q

Issues with RI

A

conceptually more complex than ROCE
not easy to compare between different size
requires a required rate (risk)
lacks clear link to ROCE of gROUP

33
Q

Issues using ROCE and RI

A

Short terms
Discourage investment assets
lack strategic control

34
Q

Limitations for financial measures of performance

A

encourage short terms
ignores strategic goals
cannot control persons without budget responsibility
historic measures (lag)
distorted

35
Q

four perspectives on BSC

A

Customer
Internal Business
Innovation and learning
Financial

36
Q

Process for setting BSC

A

Senior exec decide strategy
Budgets and information systems are linked to the measures
personal scorecards are developed
Collaborative working occurs as many targets require team work
strategy is operationalised

37
Q

Diversity of BOD,
Board member expertise
risk identification and mitigation
bribery and corruption
are performance indicators of what

A

governance

38
Q

What is relevant to measure performance of NFP

A

three es

39
Q
A

BST (10 decks)

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