1 / 16

STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION

CHAPTER 11 Evaluation & Control. STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION. THOMAS L. WHEELEN J. DAVID HUNGER. Evaluation and Control. Whatever is measured gets management attention. Whatever is rewarded gets management action. Evaluation and Control.

davidejames
Download Presentation

STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CHAPTER 11 Evaluation & Control STRATEGIC MANAGEMENT & BUSINESS POLICY11TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER

  2. Evaluation and Control Whatever is measured gets management attention. Whatever is rewarded gets management action.

  3. Evaluation and Control • Evaluation and Control Information – • Performance data • Activity reports

  4. Evaluation and Control • Measuring performance – • The end result of activity

  5. Evaluation and Control • Output controls • What is to be accomplished; focus on end result through performance targets • Input controls • Resources – skills, abilities, values, motives Activity Behavior controls How something is done through policies, procedures, rules, SOP’s e.g.ISO 9000 Standards Series, ISO 14000 Standards Series

  6. Evaluation and Control • Types of Controls – • Activity Based Costing (ABC) • Allocation of indirect and fixed costs to individual products or product lines • Based on value-added activities • More accurate charge of costs • Enterprise Risk Management (ERM) • Identify risks • Rank risks • Measure risks

  7. Evaluation and Control • Primary Measures of Performance (Output) • Traditional Financial Measures • Return on investment (ROI) • Earnings per share (EPS) • Return on equity (ROE) • Operating cash flow • Free cash flow • Shareholder • Shareholder value • Economic value added (EVA) • Market value added (MVA) • Balanced Scorecard Approach • Financial • Customer • Internal business perspective • Innovation and learning

  8. Evaluation and Control

  9. Evaluation and Control • Evaluating Top Management & Board – • Chairman-CEO Feedback Instrument • Management Audit • Strategic Audit

  10. Evaluation and Control • Divisional & Functional Performance – • Responsibility Centers • Standard cost centers • Revenue centers • Expense centers profit centers • Investment centers

  11. Evaluation and Control • Using Benchmarking – • Continual process of measuring products, service, and practices against the toughest competitors or those companies recognized as industry leaders

  12. Evaluation and Control • International Measurement Issues – • International transfer pricing • Repatriation of profit • piracy

  13. Evaluation and Control • Strategic Information Systems – • Enterprise Resource Planning (ERP) • Divisional and functional IS support

  14. Evaluation and Control • Problems in Measuring Performance – • Short-term orientation • Goal displacement • Behavior substitution • Suboptimization

  15. Evaluation and Control • Guidelines for Proper Control – • Minimum amount of information necessary • Meaningful activities and results • Timely • Long and short-term • Pinpointing exceptions • Meeting/exceeding standards

  16. Evaluation and Control • Strategic Incentive Management – • Weighted-factor method • Long-term evaluation method • Strategic funds method

More Related