Non Financial Measures Flashcards
What are the 6 Non Financial performance indicators ?
Productivity, Market share, Sales target, Environmental impact, Quality, Customer Satisfaction
Define Productivity A01
The output produced in relation to the
inputs used for a given time period(Outputs per worker)
Result of improving productivity for a business?
The firm can make more profit per unit or can reduce the price to become more competitive
5 Example Methods of improving labour productivity
^ Number hours worked, training, investment in equipment + tech, changing the way work is done, motivating employees
Define market share + Formula a01
Sales of a firm relative to the market size > Sales of a business/ Total sales in a market x 100%
Why is Market share important?
Indicate if a firm is leading - which can influence strategies/tactics for business .Indication of success or failure due to its strategy
What would a business do with small MS ?
They may set a target of increasing its share by a certain amount over a fixed period
Examples of Environmental policies organisations now have?
Limit the amount of noise pollution they do(noise, air, waste), Restricting wildlife damage, using renewable energy sources
What’s an environmental audit?
Assess the environmental impact their activities are having
What is customer satisfaction?
Meeting the needs of customers- important due to market orientation.
Business offer good customer satisfaction - more likely customers return/ recommend to others.
How can Customer satisfaction be measured?
Questionnaires, repeat purchases, referrals, recording telephone convos
How does quality affect the business?
Firms always look to improve quality - poor quality=lack of efficiency,it ^ cost + reduces profit.Alos affects repuattion.
Define Sales target A01
Amount of sales taht a firm makes in either money or volume in a specific time period compared with its objectives.
Why are targets set?
Set for goals to aim for- included in firms budget- revenue generated from sales indicate how high expenditure budget can be .Can motivate/ demotivate
Benefit/Drawbacks Productivity A03
+High productivity -lower unit costs
-Speed of working - reduce quality
Benefit/Drawbacks Market share A03
+^indicate the success of business
- Doesn’t show market growing/shrinking
Benefit/Drawbacks Sales Target A03
+Whether objectives been met
-Factors outside buisness cause sales target be missed
Benefit/Drawback Environment A03
make the firm appear more environmentally friendly - impress current + potential customers
- Long time for environmental policies to take effect- require new suppliers/ gradual reduction in pollution
Benefit/Drawback Quality A03
+Rise in quality- lead to increase in demand+ increase in profit
- Measures used not be cost-effective, cost outweighs potential gain
Benefit/Drawback Customer Satisfaction A03
+Content customers vital for success
- Difficult to measure-if using Questionnaire those not happy may not respond.
