Implementing Strategy Flashcards
Overview of Strategic Performance measures
A good starting point on what to measure will be the Corporate Objectives
These are linked through to the mission and vision so vertical consistency
Outputs in the form of KPI are linked to CSF and achievement of strategic targets
Explain the Balance Scorecard
Financial - How should we create value for S/h to be seen as succseeding financially
Customer - To achieve vision, how should we appear to customers (what do they value - cost, quality reliability)
Innovation & Learning - To create value and maintain competitive position
Internal Business Process - Process we must excel at to achieve financial and customer objectives
What are the steps to setting up a Balance Scorecard
- Identify the CSF
- Identify the core competences needed
- Develop KPI’s
- Caputre Data needed to measure KPI
- Reporting to indicators to staff
- Develop improvement programmes
What are the internal and external factors when looking at the performace pyramid
Internal
- Financial Measures
- Flexibility & Productivity
- Process Time & Waste
External
- Market satisfaction
- Customer satisfaction & Flexibity
- Quality and Delivery
What does the Peformance Pyramid useful for?
Highlights the links between Vision and Corporate strategy
Promote and ensure goal congruence
What are some of the criticisms of the BS & PP
- Costly to set up and maintain
- Information overload and may lose sight of the objective
- May slow down decision making
Briefly describe Single & Double Loop Feedback (cybernetic control)
Single - results in the system behaviour being alterted to meet plan
Double - the plan itself is changed
Emmanuel et al decribed 4 conditions that must be satisfed when looking at process controls
Objectives - must exist
Output must be Measurable
Predictive model needed
Capability of taking actions
What is the purpose of performance management
- Motivation for staff
- Provides feedback
- Communication to stakeholder groups
- Linked to incentives
Neely summarised the purpose of Performance Management into the 4 CP’s
Check Position - how are we doing. Fin and NF
Communicate Position - to stakeholders
Confirm Priorities - Set targets and plans to achieve
Compel Progress - driver for change
In Fitzgerald and Moon Building Block Model - what are the Dimensions and what is it used for?
Results
- Financial performance
- Competetiveness
Determinants
- Quality
- Flexibility
- Resource Utilisation
- Innovation
Controlling and improving performace in Determinants should lead to better Results
In Fitzgerald and Moon Building Block Model - what are the Standards & Rewards and uses
Standards
- Ownership
- Achivability
- Fairness
Rewards
- Clarity
- Motivated
- Controlability
What is Target cost
This is what the cost of a product should be over its entire PLC
What are the issues with using Performance Measures
- Tunnel Vision - Focus on performance measure to the detriments of others
- Sub-optimisation - Focus on new biz rather than existing
- Myopia - Short term focus (max rev rather than innovation)
- Gaming - Underperforming in one period to ensure taregts are kept low
- Ossification - Rigid system and unwillign to change
- Misrepresentation - of facts to be favour of business
- Measure fixation - Focus on the measure rather than underlying goals (cost of audit)
What are the strengths and weaknesss of ROI
Strengths
- Comparable against other unequal division
- Easily understandable
- Useful for external investors
Weakness
- Lead to dysfunctional behaviour
