1. Control
Techniques
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2. Stakeholder
Measure
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3. Balanced Score Card
Robert kaplan and David Norton's organizational
performance management tool
A strategic planning and management system used to align business
activities to the vision statement of an organization'. A Balanced
Scorecard attempts to translate the sometimes vague, pious hopes of a
company's vision/mission statement into the practicalities of managing
the business better at every level.
Requirements
•The company's mission statement
•The company's strategic plan/vision
•Then
•The financial status of the organization
•How the organization is currently structured and operating
•The level of expertise of their employees
•Customer satisfaction level
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4. Powerpoint Templates
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5. Balanced Scorecard - factors examples
Department Areas
Finance Return On Investment
Cash Flow
Return on Capital Employed
Financial Results (Quarterly/Yearly)
Internal Business Processes Number of activities per function
Duplicate activities across functions
Process alignment (is the right process in the right
department?)
Process bottlenecks
Process automation
Learning & Growth Is there the correct level of expertise for the job?
Employee turnover
Job satisfaction
Training/Learning opportunities
Customer Delivery performance to customer
Quality performance for customer
Customer satisfaction rate
Customer percentage of market
Customer retention rate
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6. A Balanced Scorecard should result in:
Improved processes
Motivated/educated employees
Enhanced information systems
Monitored progress
Greater customer satisfaction
Increased financial usage
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7. Accounting
Measures
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8. ROI
A performance measure used to evaluate the efficiency of
an investment or to compare the efficiency of a number of
different investments. To calculate ROI, the benefit (return) of
an investment is divided by the cost of the investment; the
result is expressed as a percentage or a ratio.
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9. Powerpoint Templates
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10. Economic &
Financial
Measures
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11. Economic Value Added
• EVA is a measure of financial performance based on the
context that all capital has a cost and that earning more than
the cost of capital creates value for shareholders. The real
profit that is of interest to investors is the profit after
deducting the capital costs. This profit figure is often called
Economic Value Added, EVA (or Economic Profit or Residual
Income
• The formula for calculating EVA is as follows:
= Net Operating Profit After Taxes (NOPAT) - (Capital * Cost of
Capital)
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12. Market Value Added
• The difference between the current market value of a firm and
the capital contributed by investors.
• If MVA is positive, the firm has added value.
• If it is negative, the firm has destroyed value.
• The amount of value added needs to be greater than the firm's
investors could have achieved investing in the market portfolio.
• Measure of wealth a company has created for its investors
• Cumulative measure of corporate performance
• Primary objective of co.- Maximizing MVA
• MVA = [(Shares outstanding x Stock price) + Market value of
preferred stock+ Market value of debt] – Total capital
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13. Queries ???
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