Scribd Logo
Upload

Welcome to Scribd!

  • 526 views

    Key Success Variables & Measures of Performance

    Uploaded by

    Harshit Manik
    The document discusses key success variables and measures of performance for organizations. It identifies several important sources of key variables, including industry characteristics, environmental factors, competitive strategy, stakeholders, and significant functions. Some examples of key variables mentioned are profitability, market position, raw material availability and quality, capacity utilization, order book position, market share, and asset turnover. Both financial and non-financial measures are important to consider. Implementing a performance measurement system involves defining an organization's strategy, measures of that strategy, integrating measures into management systems, and regularly reviewing results.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd

    Key Success Variables & Measures of Performance

    Uploaded by

    Harshit Manik
    526 views15 pages
    The document discusses key success variables and measures of performance for organizations. It identifies several important sources of key variables, including industry characteristics, environmental factors, competitive strategy, stakeholders, and significant functions. Some examples of key variables mentioned are profitability, market position, raw material availability and quality, capacity utilization, order book position, market share, and asset turnover. Both financial and non-financial measures are important to consider. Implementing a performance measurement system involves defining an organization's strategy, measures of that strategy, integrating measures into management systems, and regularly reviewing results.

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses key success variables and measures of performance for organizations. It identifies several important sources of key variables, including industry characteristics, environmental factors, competitive strategy, stakeholders, and significant functions. Some examples of key variables mentioned are profitability, market position, raw material availability and quality, capacity utilization, order book position, market share, and asset turnover. Both financial and non-financial measures are important to consider. Implementing a performance measurement system involves defining an organization's strategy, measures of that strategy, integrating measures into management systems, and regularly reviewing results.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    526 views15 pages

    Key Success Variables & Measures of Performance

    Uploaded by

    Harshit Manik
    The document discusses key success variables and measures of performance for organizations. It identifies several important sources of key variables, including industry characteristics, environmental factors, competitive strategy, stakeholders, and significant functions. Some examples of key variables mentioned are profitability, market position, raw material availability and quality, capacity utilization, order book position, market share, and asset turnover. Both financial and non-financial measures are important to consider. Implementing a performance measurement system involves defining an organization's strategy, measures of that strategy, integrating measures into management systems, and regularly reviewing results.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 15

    KEY SUCCESS VARIABLES & MEASURES OF PERFORMANCE

    MCS / 4

    INTRODUCTION
    A key variable is a significant indicator of business activity, whose sudden and unpredictable change warrants immediate action by management. A small change in a key variable will have significant impact on the performance of the organization. E.g.: profitability, market position.

    KEY VARIABLES
    Sources of key variables: Industry characteristics. Environmental factors. Competitive strategy. Stake holders. Significant functions.

    KEY VARIABLES
    Industry characteristics: In a given industry, there are certain general requirements for success, which apply to all the firms. E.g.: in insurance industry, the basic requirement for the success of a firm is a positive investment performance.

    KEY VARIABLES
    Environmental factors: The economic and political climate consist of environmental factors which determine key variables. E.g.: publishers who depend on the postal services are affected by postal rates.

    KEY VARIABLES
    Competitive strategy: The strategy that a company adapts usually determines the variables that must be monitored and emphasized. An organization that follows a low- cost strategy will require an analysis of the product cost structure.

    KEY VARIABLES
    Stake holders: Aspects of the business that are important to key stake holders, namely customers, executives, suppliers may be considered as key variables.

    KEY VARIABLES
    Significant functions: In an organization with a function based structure, every manager can identify one or a few key variables related to the function of the unit.

    KEY VARIABLES
    Identification of key variables 1. Input variables: Raw material availability. Raw material quality. Raw material costs. 2. Production variables: Capacity utilization. Losses. Quality control. Maintenance. Costs. Delivery.

    KEY VARIABLES
    Marketing variables: Order book position. Market share. Institutional sales. Asset management variables. Asset turnover. Working capital turnover.

    KEY VARIABLES
    Types of variables broadly classified as: Strategy. Structural. Process. Environmental.

    KEY SUCCESS VARIABLES


    KEY SUCCESS FACTORS / VARIABLES What are they? FINANCIAL & NON-FINANCIAL measures NON-FINANCIAL measures:1. CUSTOMER-FOCUSED: Bookings, Backorders, Market Share, Key a/c orders, Customer satisfaction / retention / loyalty. 2. INTERNAL BUSINESS PROCESS: Capacity utilization, On-time Delivery, Inventory turnover, Quality, Cycle time(processing + storage + movement + inspection)

    IMPLEMENTING

    PMS

    It involves 4 general steps. 1. Define STRATEGY. 2. Define MEASURES OF STRATEGY. 3. Integrate measures into the MANAGEMENT SYSTEM. 4. REVIEW MEASURES & RESULTS frequently.

    IMPLEMENTING

    PMS

    Difficulties in Implementing PMS 1. Poor Correlation between Nonfinancial Measures & Results 2. Fixation on Financial Results 3. Measures not updated 4. Measurement overload 5. Difficulty in establishing trade-offs

    EVA
    In corporate finance, Economic Value Added or EVA, is an estimate of a firm's economic profit being the value created in excess of the required return of the company's investors (being shareholders and debt holders). EVA is the profit earned by the firm less the cost of financing the firm's capital. The idea is that value is created when the return on the firm's economic capital employed is greater than the cost of that capital. This amount can be determined by making adjustments to GAAP accounting.

    You might also like