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Financial measures Budget comparisons and analysis It involves making structured projections of the expected business activities before a financial year It aims at maximizing profits by cutting down operational costs It helps in the formulation of strategies and action plan aimed at achieving the set targets It creates a picture of the performance of the company and its ability to meet targets Action Policymakers can revise the existing strategies They can avoid the recurrence of past mistakes in the future Return on Investment (ROI) It is a mathematical technique for appraising the profitability and viability of an investment It is important to persons involved in decision making It is important when a decision has to be made regarding an investment to be financed through borrowed money It is best for decisions on mutually exclusive investments Action The management only invests in projects with a positive ROI Projects are ranked in descending order according to their ROI values Human resource measures Employee satisfaction survey It establishes workforce job satisfaction It considers employees’ attitude towards the organization, compensation, and carrier development opportunities It provides the base for future planning It provides data necessary for the improvement of employees’ motivation Workers can express their dissatisfactions The management can evaluate the workers’ opinions and engage employees in the evaluation process All employees’ grievances should be considered Performance evaluation It refers to the appraisal of an individual worker’s performance Important records include attendance and punctuality records, overtime records, leave records, sales records It seeks to determine workers’ suitability and compliance with the organization’s policies It provides information to support salary increments, promotions, transfers, demotions, and terminations. The management can decide to effect demotions, transfers, or lay off workers based on this evaluation Market position measures Market share It is the portion of the whole market that a given company controls It is important in conducting a market survey It determines the kind of customers a company wants It helps to decide whether the existing share is enough The management makes decisions based on the market share: whether shrinking or expanding Managers decide whether to retain or improve the current market share Size of the company in comparison to competitors Companies operate under high competition The size of a company determines its competitive advantage Knowing the size of competitors will help in understanding their weaknesses Thus, it is easy to compete by improving the quality of the products and maintaining good relations with customers Competitors information aids in decision-making and strategizing It helps in identifying competitors’ weaknesses Action By knowing a company’s size, the management seeks to improve the firm’s competitive advantage by: Improving the quality of the product Revising the credit policy for more sales Acquiring new machines to increase efficiency and Investing in advertisement among others Action The company may realize that poor working conditions are the barrier to customer satisfaction Hence, it can improve the working conditions Management may implement strategies to improve product quality For a new product, management may decide to spend more on an advertisement, increase its production, or drop it Product/service measures Product rate of failure It entails a product’s reliability based on its performance and appeals to the users It involves gathering information from customers on their perception of the future of a product This information is used to predict its survival Such information determines the popularity and acceptance of a product, which dictates its future. The management can thus take the right steps to avoid rejection of a product. Action The management may decide to change a product’s qualities The management may avail spare parts to enhance the durability of a product, hence improving public confidence in the same The management may drop the product to avoid losses in the end, which applies if it is proved that the product is likely to fail. Customer satisfaction survey It is an assessment of how well the products offered in the market meet the consumers’ requirements It is designed to determine the percentage of satisfied customers dealing with a firm at a given time Information on customer satisfaction highlights what needs to be done to improve the company’s profits Customer feedbacks help in making decisions on whether to test or drop the product early enough to avoid losses A company gathers information to assist in designing strategies aimed at improving products’ quality Bridging the gap between short term and long term strategies A wide gap exists in the performance measures designed to achieve short term and long term goals Mostly, organizations overlook necessary strategies to achieve their missions and visions SWOT is useful in analyzing these differences It involves Strengths, Weakness, Opportunities, and Threats References Datta, P. (2012). An applied organizational rewards distribution system. Management Decision, 50 (3), 479-501. Davies, J.,
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