MAF 551 ASSIGNMENT 3 (AC2204D) (DIVISIONAL PERFOMANCE)
DATE OF SUBMISSSION : 26 NOVEMBER 2015 NAME OF LECTURER : MISS ZAHRAH SIRAT B : 1! SITI ZURINA BINTI BUSRAH BUSRAH (2014"22253) (2014"22253) 2! SHARIFAH SHARIFAH FA FATHIAH BINTI #AN HASSAN (2014$%"1$") 3! SITI NURUL DIANAH DIANAH BINTI MOHD MUSTAF MUSTAFA A (2014$%1%41) 4!
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E./+- * -* , -,-78--9+ '; <,' ,=; ,; -+- ;,';9 - 9;*+- '> 9,/; <+* 8--9+ ';! D8-+*+,- , -,-78--9+ '; - 8--9+ '; : Non-fnancial measure is any quantitative measure o either an individual’s or an entity’s perormance that is not expressed in monetary units. This includes any ratio-based perormance measure in that a non-fnancial perormance. Example non-fnancial perormance measure includes measures o customer or employee satisaction, quality, market share, and the number o ne products. !n the other hands, fnancial measure is the results o a frm"s policies and operations in monetary terms. #ence, fnancial measure is a sub$ective measure o ho ell a frm can use assets rom its business and %enerate revenues over a %iven period o time. These results are re&ected in the frm"s return on investment, return on assets, value added, etc. 'ltimately the universal measure o business perormance is money and the ultimate orms o this measurement are the fnal accounts o the company. (oney has the advanta%e that it can be used to measure the e)ectiveness and e*ciency not only o di)erent business unctions +marketin%, en%ineerin%, production etc. but also o di)erent businesses +rom manuacturin% companies to retailers and rom hotels to %ara%es. Non-fnancial perormance measures are sometimes considered to be leadin% indicators o uture fnancial perormance, hile current fnancial perormance measures such as earnin%s or return on assets are commonly considered to be trailin% measures o perormance.
A-* , -,-78--9+ '; 9,/; <+* 8--9+ '; : F+;* -* , -,-78--9+ '; 9,/; <+* 8--9+ '; + I* 9;* 9,; +-? *, ,-7*; ,;-+@*+,- *;*+ . inancial evaluation systems %enerally ocus on annual or short-term perormance a%ainst accountin% yardsticks they do not deal ith pro%ress relative to customer requirements or competitors, or other non-fnancial ob$ectives that may be important in achievin% proftability, competitive stren%th and lon%er-term strate%ic %oals. or example, ne product development or expandin% or%aniational capabilities may be important strate%ic %oals, but may hinder short-term accountin% perormance. /y supplementin% accountin% measures ith non-fnancial data about strate%ic perormance and implementation o strate%ic plans, companies can communicate ob$ectives and provide incentives or mana%ers to address lon%-term strate%y. S9,-> -,-78--9+ * 9- /;,+ +-+;9*> '-*+**+ +-+9*,; , 8; +-*-+ *! 0ritics o traditional measures ar%ue that drivers o success in many industries are 1intan%ible assets2 such as intellectual capital and customer loyalty, rather than the 1hard assets2 alloed on
to balance sheets. Non-fnancial measures related to innovation, mana%ement capability, and employee relations, quality and brand value explained a si%nifcant proportion o a company’s value, even alloin% or accountin% assets and liabilities. /y excludin% these intan%ible assets, fnancially oriented measurement can encoura%e mana%ers to make poor, even harmul, decisions.
T+;> -,-78--9+ '; 9- **; +-+9*,; , '*'; 8--9+ /;,;-9! Even hen the ultimate %oal is maximiin% fnancial perormance, current fnancial measures may not capture lon%-term benefts rom decisions made no 3imilarly, investments in customer satisaction can improve subsequent economic perormance by increasin% revenues and loyalty o existin% customers, attractin% ne customers and reducin% transaction costs. Non-fnancial data can provide the missin% link beteen these benefcial activities and fnancial results by providin% orard-lookin% inormation on accountin% or stock perormance. or example, interim research results or customer indices may o)er an indication o uture cash &os that ould not be captured otherise. F,';*> T 9,+9 , '; ,' ,- /;,++- +-,;*+,- ,'* -;+ 9*+,- - * , -,+ +- * ';! Noise reers to chan%es in the perormance measure that are beyond the control o the mana%er or or%aniation, ran%in% rom chan%es in the economy to luck +%ood or bad. (ana%ers must be aare o ho much success is due to their actions or they ill not have the si%nals they need to maximie their e)ect on perormance. /ecause many non-fnancial measures are less susceptible to external noise than accountin% measures, their use may improve mana%ers’ perormance by providin% more precise evaluation o their actions. This also loers the risk imposed on mana%ers hen determinin% pay.
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D8-+*+,- , -9;?+- /enchmarkin% is the process o comparin% one"s business processes and perormance metrics to industry bests or best practices rom other companies. #ence, benchmarkin% are measurement o the quality o an or%aniation"s policies, products, pro%rams, strate%ies, etc. and their comparison ith standard measurements, or similar measurements o its peers. The ob$ectives o benchmarkin% ; *, *;+- <* - <; +/;,-* ; 9 ,;> *, -@ ,< ,*; ,;-+@*+,- 9+ *+; + /;,;-9 > *, ' *+ +-,;*+,- *, +/;, /;,;-9! 4n summary, the process o benchmarkin%, or identiyin% the best practices that exist in your particular business or industry, is a method that is rapidly %ainin% a reputation or helpin% businesses improve productivity and proft. 4t’s also set standards or operation throu%h measurable, scientifc, or business methods, is a concept that has developed and solidifed into a clear series o steps that beneft industry or businesses as a hole.
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'ltimately, the concept o benchmarkin% improve company perormance as can a hole by observin% competitor, identiyin% area o excellence, and on%oin% ork. irst, benchmarkin% can improve company perormance by ,;+- 9,/*+*,;! /enchmarkin% is used to identiy hat other businesses do to increase proft and productivity, and then adaptin% those methods to make your business become more competitive. 4ma%ine i you had a car lot that sells 56 cars per month and don the street a competitor sells 766 cars per month. /y studyin% and identiyin% hat your competitor is doin%, you could increase sales.
3econd, benchmarkin% can improve company perormance by +-*++- ; , .9-9 . 8nother productive use o benchmarkin% is to identiy areas o excellence ith your employees and in your existin% business. 9icture a urniture actory here one employee assembles more chairs than his co-orkers. /y examinin% his methods and settin% them as the benchmark or productivity, other employees can be trained to ork in less time. This ill increase productivity as a direct result o usin% these techniques. Third, benchmarkin% can improve company perormance by 9;*+- ,-,+- <,;?! /usinesses also use benchmarkin% as an on%oin% process that alays chan%es and adapts. /y studyin% and comparin% your benchmarks to the competition, the industry, and ithin the individual processes o your company, you allo them to evolve to meet chan%in% demands and requirements. /y keepin% your company and your personal business benchmarks &uid, you ensure that your business ollos the best practices defned by you. The end result should be a marked increase in productivity and profts.
