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GROUP-7
PRESENTED BY:
y DEBA PRASAD MISHRA
yDEBASHREE ROUT
y SANDEEP PARIDA
y SIMANCHAL DAS H
y SHARANYA G.S
y RISHI SINGH
y RAM KRISHNA
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PERFORMANCE MEASUREMENT
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PERFORMANCE MEASUREMENT
y Performance measurement is a crucial part of
evaluation and control . To achieve the
organizations goal, managers must identify
measures that are controlled or influenced byemployees action.
y A performance measurement system must
provide timely information for managementdecision to be a unifying component.
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Performance measurement is basedon certain principles
y All significant work activity must be measured and
unmeasured work should be minimized or
eliminated.
y Desired performance outcome must be established
for all measured work.
y A timed phased baseline must be developed to
evaluate total organization performance. Thisbaseline must incorporate all organizational activity.
y Operating and financial performance reporting must
be synchronized with the same reporting periods
and reporting frequency.
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y Performance reporting and variance analyses
must be accomplished frequently.
a. Frequency reporting enables timely corrective
action.
b. Timely corrective action is needed for effective
management control.
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Negative impact of performancemeasurement
y Goal displacement:- refers to the relationship
between means with ends.
They can be of 2 types, Behavior substitution: refers to a
phenomenon where activities that dont lead
to goal accomplishment are substituted for
activities that do lead to goal
accomplishment. quantifiable measures
drive out non-quantifiable measures.
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Sub-optimization: it is a situation where one
part of the organization optimizes its activities
to the detriment of the organization as a whole.
Eg: one divisions objective of achieving higher
profits can result in its refusal to share new
technology or process improvement with otherdivisions.
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TOOL FOR PROBLEM SOLVING
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TOOLS FOR PROBLEM SOLVING
y MANAGEMENT SCIENCE
y OPERATION RESEARCH
management science is a set of quantitative tools;
management science uses decision models;
quantitative models assist decision makers; they
cannot substitute for or replace a manager.
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TYPES OF MODELS AND SCIENCE TECHNIQUES
y The Program Evaluation and Review Technique (PERT). PERT isplanning and control technique that allows managers to
decompose a project into specific activities and to plan far in
advance when its is to be completed.y Breakeven Analysis. Breakeven analysis helps managers
determine how many units must be sold before a product is
profitable.
y Linear Programming. Linear programming are used todetermine the best way to allocate resources to achieve
some desired objectives.
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yGame Theory.
Game theory attempts topredict how rational people will behave in
competitive situation.
ySimulation Models. Simulation models aremathematical representations of the
relationships among variables in real-lifeorganizational situations
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Control Tools And Techniques
y Nonfinancial control techniques. Nonfinancial control
techniques include rewards and punishments,
selection procedures, socialization and training, the
management hierarchy.
y Financial Control Techniques. Financial controls help
managers to keep costs in line, maintain a viable relationshipbetween assets and liabilities, sustain adequate liquidity, and
achieve general operating efficiency.
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STRATEGIC EVALUATION AND
CONTROL
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WHAT IS STRATEGY EVALUATION AND CONTROL ;
Strategy evaluation is that phase of strategic management
process in which managers tries to assure that the
strategic choice is properly implemented and meeting the
objectives of the enterprise.
Strategic control is the process of determining what is
being accumulated so that corrective course of action can
be taken in order that performance is on the path ofprogress.
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Why strategy evaluation and control
This speaks of the importance of this function of strategic management. Wrong postulations in planning.
Ineffective strategies formulated and implemented are tobe evaluated.
To develop right reward systemIt is the strategy evaluation and control which brings tolight who are the performers, super-performers, and utterperformers , it designing a motivation at system thatworks.
Formulation of new strategies.It is the continuous monitoring that helps in completion ofthis cycle of strategy formulation and implementation.
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Modifying the present strategies.
These inputs can be well utilised in modifying the present
strategies,it is clear present and future strategies have their root in the
strategies of the past.
Integration of individual tasks.
It signifies its ability to coordinate the task performed by
individual managers, groups, division and so on through control
of performance.
Keeping check on validity of strategic choice.Evaluation provides a feed-back on the continued relevance of the
strategic choice made during the formulation phase.
Taking supportive decisions.
Help to assess whether these decisions match the intended
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TYPES OF STRATEGIC CONTROL
Premise control:Every strategies is founded on certain assumptions related to
environmental and organizational forces. Change in them is sure to
affect the strategy to a great extend. So premise control is highly
required to keep in track with the changes.
y Implementation control:
The purpose of implementation control is to evaluate as toweather these plans, programmed and projects are actually guiding
the organization to wards its pre-determined goal or not.
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Strategic surveillance:
Strategic surveillance is more generalized and overriding
control which is designed to monitor a broad range ofevents both inside and outside the organization which are
threaten the firms strategy.
y Special Alert control:
It is based on a trigger mechanism for a rapid
response and immediate reassessment of a givenstrategy in the light of a sudden and unexpected
events.
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PROCESS OF CONTROL AND EVALUATION
REVISE RESET REFINE
FEED-BACK
OBJECTIVES
STRATEGIES
PLANS
SETTING
PERFORMANCE
STANDARD
ACTUAL
PERFORMANCE VARIENCE
ANALYSIS
CORRECTIVE
ACTION
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STRATEGIC PLANNING AND
AUDIT
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strategic planning
y strategic planning identifies where theorganization wants to be at some point in the
future and how it is going to get there. The
"strategic" part of this planning process is thecontinual attention to current changes in the
organization and its external environment, and
how this effects the future of the organization.Skills in strategic
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planning are critical to the long-term success of your
organization.
This form of planning includes:a)Taking a wide look around at what's going on outside the
organization and how it might effect the organization (an
environmental scan)
b) Taking a hard look at what's going on inside the organization,including its strengths, weaknesses, opportunities and threats (a
SWOT analysis)
c) Establishing statements of mission, vision and values
d) Establishing goals to accomplish over the next (usually) threeyears or so, as a result of what's going on inside and outside the
organization
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Strategic Audit MeasurementMethodology
y The Evaluation Of Corporate Strategy
Each organization has its own approach to evaluation.
There are not absolute answers as to the proper evaluation
standards. However, there are three basic questions to ask instrategy evaluation:
y Is the existing strategy any good?
y Will the existing strategy be good in the future?
y Is there a need to change a strategy?
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Qualitative Organizational Measurement
yThere is no universally endorsed list of
critical questions designed to reflect
important facets of organizationaloperations. However, several that might
be useful to the practicing managers are
presented below.
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Quantitative measurements
yQuantitative measurements provide information and
insight as to how well an organization is
accomplishing its goods and objectives. Inattempting to evaluate the effectiveness of corporate
strategy quantitatively, we can see how the firm has
done compared wit its own history, or compared
with its competitors.
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Many quantitative measures may be developed to
determine performance results.
These standards expressed in quantitative terms include:
Sales (growth of sales)
Net profit
Dividend returns
Return on equity
Return on investment
Return on capital
Marker share
Earnings per share
The list is long and many other factors could be included.
The objective of all of these endeavors is financial control.
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THANK YOU