Performance Objectives
Discuss About The Managing Financial Principles And Techniques.
In today’s business world, measuring the performance of the business organizations has great significance for the success of the businesses as it provides the companies with the knowledge of the areas where strategic focus needs to be put (Melnyk et al. 2014). In this context, Balanced Scorecard is considered as a major tool for the development of performance objectives, strategies for them and the execution plan to achieve those objectives. The approach of balanced scorecard helps the companies in focusing four major performance related areas; they are financial performance, customer satisfaction, internal business processes and learning and growth for the employees. Companies are required to develop the performance objectives and strategies by taking into consideration all these four aspects (Avram & Avasilcai, 2014). The main aim of the study lies in the analysis of the various components of performance measurement of a business. For the purpose of this report, Samsung is taken into consideration. Thus, the objective of this report is to develop performance objectives, execution plan along with the processes to monitor them.
Samsung is regarded as one of the major conglomerate companies having business operation all over the world. Samsung was established in the year of 1938 and the company is headquarters at South Korea. It needs to be mentioned that Samsung has their presence in different kinds of business industries; they are automotive, apparel, electronic products, chemicals, telecommunication and others (samsung.com, 2018). In addition, Samsung also has presence in some of the service industries; they are advertising, construction, hospitality, telecommunication and others. The vision or the business commitment of Samsung is to create a better world with the help of their digital experience, innovative technologies and different other products (samsung.com, 2018).
Business organizations are required to involve themselves in some specific stages in order to measure their business performance. One of such steps is to set specific objectives in order to measure the performance of the companies and there is not any exception of this fact in case of Samsung.
Samsung is required to develop the required performance objectives or the goals for the development of strategies or plans for their execution. At the time of the development of the performance objectives, Samsung is required to consider the four perspectives of balanced scorecard. The following discussion shows the major performance objectives of Samsung under the four heads to balanced scorecard:
Intended Strategies
Followings are the main objectives of Samsung for measuring the financial performance:
Increase in the Profit Margin: The main financial objective of Samsung needs to be the increase in the net profit of their business as increased profitability is considered as the main fuel for the smooth going of the businesses (Melnyk et al., 2014).
Growth in Revenue: The next major financial objective for Samsung is to increase the amount of revenue as it is considered as the major mean to increase the profitability of the business.
Improvement in Cash Flows: The next financial objective of Samsung should be increasing the net cash inflow of the business in order to ensure the smooth running of all the business operations.
Decrease in Operating Costs: One major way to increase the profitability of the company is to decrease the amount of operating expenses and it is the next financial objective of Samsung (Melnyk et al., 2014).
Followings are the main objectives of Samsung for measuring customer satisfaction:
Improve the Quality of Products and Services: The major mean to satisfy the customers is to bring improvement in the products and services of Samsung and thus, it is a major objective for satisfying the customers.
Build Win-Win Relationship with the Customers: Another major objective is to build a situation where both the company and the customers will be satisfied (Hill & Brierley, 2017).
Improve End User Experience: Another objective of Samsung is increasing the overall experience of the end customers.
Monitor Threats for Product and Service Reputation: In this context, the last objective is to make monitor the threats of product or service reputation related to the satisfaction of the customers (Hill & Brierley, 2017).
Followings are the main objectives of Samsung for measuring internal business processes:
Introduction of Innovative Products and Services: The first objective of Samsung in this context is to introduce innovative products and services for gaining the competitive edge as well as fulfill the requirements of their customers.
Reduction in Waste in the Supply Chain: It is one of the major functions of the internal control to reduce the amount of waste from the business processes of the companies. For this reason, another major objective of Samsung is to reduce the amount of waste in the supply chain of their business operation (Grant, 2016).
Shorter Time from Start to Finish: It required efficiency from the internal control of the companies to take less time from the purchase of raw materials to delivery of the finished products to the end customers. Thus, another major objective of Samsung is to reduce this time.
Inventory Management: Effective management of inventory is possible in the presence of the efficient internal control. Hence, another objective of Samsung is the effective management of inventory (Grant, 2016).
Followings are the main objectives of Samsung for ensuring the learning and growth of the employees:
Increase Employee Awareness: One major objective of Samsung under this section is to make their employees aware of all the processes as well as other aspects of the business of Samsung in order to increase their efficiency (Lee, Hsieh, & Chen, 2013).
Increase in Information Flow: The next major objective for Samsung is to provide the employees with all the required information so that they do not face any problem while performing their tasks.
Make the Employees Skilled: The last objective under this section of Samsung is to make the employees with skillful for their businesses.
The above are the main objectives of Samsung under the four perspectives of Samsung in order to measure the performance of their business. Samsung is needed to take into consideration all these objectives while developing the performance measurement strategies.
The followings are the intended strategies in order to achieve the above-discussed objectives for measuring performance of Samsung:
In order to increase the net profit of the business, the major strategy of Samsung will be the reduction in the cost of goods sold. These costs can be labor costs for manufacturing, direct purchase of the materials and others (Albertini, 2013). Samsung is also required to increase their customer base as it is the main way to increase the overall revenue of the business. At the same time, Samsung needs to take the strategy to increase the frequency of transaction per customer. Rise in prices cab be also a strategy. Moreover, in order to improve the cash flow of the business, Samsung is needed to adopt the strategy to take more leases than buying the assets. At the same time, Samsung needs to check the creditability of their customer in order to avoid major bad debts. Lastly, in order to decrease the amount of operating costs of business, Samsung is needed to adopt the strategy of using advanced technology in their manufacturing as well as other business operations (Albertini, 2013). At the same time, producing cost cutting can be another major strategy for decreasing the operating expenses.
In order to improve the quality of products and services, the main strategy of Samsung will be the planning for quality improvement as this will allow the company in providing superior priority in every procedure of their internal businesses. In this context, Samsung can adopt the strategy to compare their products with the products of other companies to get idea about the deficiencies in their products (Hill & Alexander, 2017). Moreover, in order to build a win-win relationship with the customers, Samsung needs to adopt the strategy to get clear understanding about their target market. At the same time, Samsung needs to be clear about their networking goal in order to provide their customers with the required products and services. Samsung is needed to modernize their technological support so that the employees of Samsung can become able in resolute the technological challenges in a faster manner (Hill & Alexander, 2017). At the same time, Samsung is needed to adopt the strategy to enable effective collaboration. Lastly, Samsung is needed to develop a team that will be liable for monitoring the reputation threat for products and services.
At the time of the development of the new products and services, Samsung is needed adopt the strategy to analyze the life cycle of the products and services in order to know about the correct time to innovatively develop them (Glykas, 2013). The main strategy for the reduction in waste for Samsung is the centralized purchase system and the reuse of the extra materials. At the same time, improvement in the product recycling program is another major strategy for waste management. Samsung is needed to adopt the strategy to improve the reliability in the supply chain for reducing the time from raw material purchase to the delivery of final product. Lastly, Samsung is needed to adopt the strategy to select the correct inventory management platform (Glykas, 2013).
In order to increase the employee awareness, Samsung is required to present the important factors in compelling element. At the same time, improvement in success measurement is another way to increase the employee awareness. Moreover, Samsung is needed to adopt the strategy to use diverse methods for capturing data. At the same time, Samsung is needed to make all the results visible for the employees of the company. Lastly, Samsung is needed to adopt the strategy to provide effective training to the employees in order to make them skillful (Certo, 2018).
For the execution purpose, Samsung is required to identify more efficient methods of manufacturing so that the cost of goods sold can be reduced. In order to execute the strategy to increase the customer base, Samsung is needed to deliver more products and services in less time. At the same time, leasing will help Samsung to pay in small increments that will improve the cash flow of the company. At the same time, Samsung is needed to implement the strategy to conduct credit check on customers as a part of credibility analysis. In addition, Samsung has the option to implement different manufacturing process like lean manufacturing for decreasing the operating expenses (Picard, 2014).
In this aspect, Samsung is needed to conduct talk sessions with the customers so that they can get the idea about the aspects about the products and services that the company is required to improve. At the same time, Samsung is needed to strategically pick and choose the opportunities for networking in relation to the target market analysis. Moreover, Samsung is needed to develop a separate team that will handle all the technical issues of the company so that the experience of the end users can be improved. Conducting meeting with the members of all teams will increase the overall collaboration among the departments (Miles 2013).
For the execution of the strategies for innovative products and services, the major execution plans will be analysis of the product lifecycle, development of ideas, develop products and services as per the market needs, adoption of effective pricing strategy, undertake project development process, investment, control and others (Chang, 2016). At the same time, consolidation of the commonly used workplace supplies will be the major step for reduction in waste. Moreover, Samsung is needed to optimize the purchase from the suppliers. They can also adopt the strategy of 4Rs that is reduction, reuse, recycling and recovery for waste management. For inventory management, Samsung can adopt various techniques like Just in Time (JIT) method, Economic Order Quantity (EOQ) method and others (Chang, 2016).
In this process, the requirement for Samsung is to develop a team that will be responsible for providing the employees with all the required training session on the needed areas so that they can become skillful. At the same time, Samsung needs to give access of the database to their employees in order to ensure the free flow of information within the organization (Cunningham & Hillier, 2013).
In order to measure the performance of Samsung related to the performance objectives, there needs to performance measures. The following discussion shows the performance measures of the strategies identified under each perspective of balanced scorecard:
For the measurement of the increase in the profit margin, Samsung will monitor the profit margin of the company. After that, for measuring the improvements in the cash flows, Samsung will monitor the amount of net cash generated from the business operation of Samsung. After that, Samsung will compare the increase in the sales and the sales per customers in order to measure growth in revenue. Lastly, in case of the decrease in operating expenses, Samsung will monitor the amount of operating expenses of their business (Susilawati et al., 2013).
In order to measure the quality improvement of the products and services, Samsung will use the number of customer contact points. After that, in order to measure the performance related to the development of win-relationship with the customers, the company will monitor the growth in the gross profit of the company. For the improvement in end user experience, Samsung will monitor the number of service related complaints. Samsung will use extent of negative coverage of quality in press for measuring the performance for monitoring reputation threat (Robinson & Sensoy, 2016).
Samsung will use the Return on Investment (ROI) of the new products and services for measuring the performance for the innovative products and services. Pounds of scraps will be used for waste management. The total time from the raw materials to the delivery of end product will be used as a measure for shorter time from start to finish. Activity costs will be used for inventory management (Parida et al., 2015).
The number of employees attending the risk management training program will be used as a measure for increase in employee awareness. Change in information report will be used as a measure for improvement in information flow. The skills and competencies of the employees will be used for measuring the performance of the employees (Saunila, 2016).
Conclusion
From the above discussion, it can be observed that there are certain stages in the process of performance measurement of Samsung. The first step involves in the development of the objectives of performance measurement under the four major heads of balanced scorecard; like increase in profit margin, improvement in the quality of the products and services and many others. After this process, the next process involves in the development of intended strategies for fulfilling the above objectives. In this process, it is required to develop the strategies in such a manner so that they have connection with the objectives of performance measurement. After that, the next process is to develop the plans by Samsung for the correct execution of the above-strategies. In this process, Samsung is needed to implement the means or the ways to implement the strategies. The last part involves in the development of the performance measures in order to measure the performance of the company.
References
About Us | Samsung US. (2018). Samsung Electronics America. Retrieved 26 June 2018, from https://www.samsung.com/us/aboutsamsun
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