Unit 7.3 Assessing Performance

Question 1

Kaplan & Norton

Answer 1

Assesses performance by financial/non financial objectives

Question 2

4 perspectives of Kaplan Norton

Answer 2

Financial
Customers
Internal process
Organisational capacity (learning & growth)

Question 3

Key features of Kaplan Norton 3

Answer 3

Needs to align with overall strategy and vision of business
Emphasis on non-financial measures
Balance 4 indicators i.e improving on area without detrimenting another

Question 4

Financial K&N question, measure, target, initiatives

Answer 4

Q:How to create value for shareholders
M:ROCE, profit margins etc
T:Increase ROCE of 3%
I:Ways to increase rev/decrease costs

Question 5

Internal processes question, measure, target, initiatives

Answer 5

M:Capacity utilisation, unit costs, productivity
T:Increase labour productivity by 15%
I:New capital/tech, training, motivation

Question 6

Organisational capacity (learning&growth) QMTI

Answer 6

Q:How to grow and improve
M:Labour retention, staff development
I:Training, changing organisation design

Question 7

Customers K&N QMTI

Answer 7

Q:How to improve customer service
M:Brand loyalty, customer satisfaction
I:Speed up delivery, improve quality/service

Question 8

Pros cons of KN 33

Answer 8

Holistic view
Appraises long term success-rather than just financial (short term)
Flexible-measures can be chosen by business

Too many KPI can be bad
Need to balance-e.g R&D for customers/internal processes can affect financial
Senior management over concerned with financial

Question 9

Ellingtons

Answer 9

Measures performance by 3 overlapping areas-people profit planet

Question 10

Outline the 3 parts of Elkingtons

Answer 10

Profit-financial measures of company
People-company’s social values towards employees and community
Planet-company’s environmental values and impact to environment

Question 11

Middle area in elkingtons

Answer 11

Area of Sustainability-ideal balance between the 3 areas

Question 12

Examples of objectives for Elkingtons

Answer 12

People-paying more than living wage

Planet-use of sustainable inputs, reducing emissions

Question 13

Benefits Drawbacks of Elkingtons 3,1

Answer 13

Encourages holistic thinking
Encourages CSR reporting
Important in increasingly ethically/environmentally conscious society

Difficult to measure people or planet

Question 14

Reason for non financial data

Answer 14

Considers other internal factors that can combine to create a CA

Question 15

Non financial performance measures (3)+ examples

Answer 15

Marketing e.g market share, sales growth, market growth
Operations e.g capacity utilisation, unit costs
HR e.g retention, morale, skill of workforce

Question 16

Core competences and example

Answer 16

Unique features that make the business unique and give CA e.g innovation-Tesla

Question 17

Characteristics of core competences 3

Answer 17

Hard to copy
Offer benefits to consumer
Able to change to meet changing market

Question 18

Prahalad + Hamel theory on core competences

Answer 18

Focus on core competencies, outsource non-core activities

Question 19

Criticisms of Prahalad + Hamel (3)

Answer 19

Too much outsourcing harms competitiveness

Core competences hard to identify

Can become complacent

Question 20

Benchmarking

Answer 20

Looking at other businesses to see what they do well, and apply to business. Businesses must be similar to compare.

Eval:doesn’t mean it can be translated