SG 10 - Strategic Process - Performance Management

Question 1

What does strategic PM entail?

Answer 1

Moving from high-level ideals to specific actions

Question 2

How is PM different from financial controls?

Answer 2

Focus on achievement of strategic goals rather than safeguarding assets, compliance etc.

Question 3

4 key aspects essential in PM

Answer 3

• identify KSF’s (outcomes that must be achieved to be successful)
• identify KPI’s (goals/expectations)
• develop a method to track progress (leading/lagging indicators)
• determine an effective intervention mechanism

Question 4

What levels of org doesn PM examine behaviour?

Answer 4

All levels - individuals/business units/entity itself

Question 5

What does control systems include? What are mission and values statements in this? Corporate culture?

Answer 5

Input, output and feedback. High-level input.

Question 6

How does structure support PM?

Answer 6

Knowing who is responsible and limits of their control provides input control.
It also allows who should receive feedback and at what frequency.
Also dictates ability to provide feedback and take corrective action.

Question 7

How important is it to have the right person in authority?

Answer 7

Very as they will be responsible for identifying problems, providing resolutions.

Question 8

What centres are departments normally? And divisions or business units?

Answer 8

Centres = cost/profit

Divisions/bus units = profit

Question 9

Two common types of input controls

Answer 9

Budget
Employee goal setting

Must align with strategic objectives

Question 10

What does policies and procedures do?

Answer 10

Formalize an organization’s corporate culture.
They can provide guidance, set boundaries and influence behaviour
They cannot cover every possible instance or ensure good behaviour.

Question 11

Best practices for P&P

Answer 11

• must be mapped to strategy, standards, or regulations
• should be centrally maintained
• must clearly identify the person who is ultimately responsible for compliance
• must state the means by which compliance is monitored
• must include the method of investigation (procedures)
• must include ways to correct the behaviour and/or consequences for failure to comply
• should be digital and make use of technology-based collaborative platforms
• should be accessible by all employees
• should be reviewed and updated on a specific renewal schedule

Question 12

Are companies required to have a code of ethics?

Answer 12

Yes if publicly listed

Question 13

Features of codes of conduct

Answer 13

• formalizes entity’s adherence to good behaviour.
• capable of guiding managerial decisions as they seek to implement strategy
• sets boundaries within which acceptable behaviour occurs
• written in an understandable and comprehensive manner
• should be included as part of every employee’s orientation
• align with corp values and CVP
• reviewed and updated as needed

Question 14

Importance of monitoring in code of conduct

Answer 14

must determine how breaches are addressed, what procedures will be used to investigate, and what remedies are available.

Question 15

How are budgets used as an output control?

Answer 15

Variance analysis

Question 16

Other output controls

Answer 16

Comparing employee achievement to pre-set goals

Development of standards

Question 17

KSF vs CSF

Answer 17

Key success factor - something that must be achieved in order to accomplish strategic goals
Critical success factor - something that is extremely important

Question 18

Way of building KSF to granular actions

Answer 18

Corp strategy - KSF - Responsibility (dept/business unit) - Action

Question 19

What does VRINE stand-for?

Answer 19

Valuable
Rare
Inimitable
Non-substitutable
Exploitable

Used for identifying KSF’s

All VRINE’s will be a strength and a KSF

Question 20

How is value chain analysis separated out?

Answer 20

Primary activities

Support activitieis

Question 21

Balanced Scorecard details and 4 pillars

Answer 21

PM system put in place to assist management with the execution of strategy
Emphasizes that success must be measured against more than the bottom line

Financial
Customer
Internal Process
Learning and Growth

Question 22

What are KPI’s?

Answer 22

Measures of activities or elements identified as KSF/CSF

Question 23

Wheredoes strategy flow from?

Answer 23

Generic strategy (cost leadership/differentiation)

Question 24

What does generic strategy identify

Answer 24

Competitive advantage

Question 25

How many KSF/KPI should be implemented?

Answer 25

5-8 KSF, and 1-2 KPI per KSF

Question 26

SMART

Answer 26

Specific
Measureable
Attainable
Realistic
Timely

Question 27

Leading indicators

Answer 27

Activity or measure that can be used to predict outcomes
Not always accurate, but can be useful
Focus on short-term performance and can identify corrective actions

Question 28

Lagging indicators

Answer 28

Measure past performance
AKA outcome measures
Identifies problems, but after the fact

Question 29

How does feedback and corrective action work?

Answer 29

Provided timely feedback, the person responsible should have a clear understanding of how to take corrective action
Org structure determines chains of command and responsibility