Case Enager Industries
CASE ENAGER INDUSTRIES
1.0 Performance Measurement
In today’s advanced and rapidly changing manufacturing environment, operational performance measures are taking on ever-greater importance. It is due to the influences of worldwide competition, just-in-time inventory management, and an emphasis on product quality and customer service.
A multidimensional conceptualization of organizational performance related predominately to stakeholders, heterogeneous product market circumstances, and time. A review of the operationalization of performance highlights the limited effectiveness of commonly accepted measurement practices in tapping this multidimensionality.
Market competition for customers, inputs, and capital make organizational performance essential to the survival and success of the modern business. Marketing, operations, human resources (HR), and strategy are all ultimately judged by their contribution to organizational performance. Organizations are heterogeneous in their resources and capabilities and how and where they choose to use them. Large organizations use both financial and nonfinancial performance measures but favor financial measures.
1.1 Financial Performance Measurement
Financial performance measures give little or no guidance to future performance since they do not include any measures relating to customers’ satisfaction and organizational learning. Furthermore, Eccles and Pyburn (1992) claim that financial performance measures are oriented internally rather than externally. A performance measurement and evaluation system involves comparing actual performance with targeted performance in terms of budgets or the past period’s performance. Both of them (target and measures) are developed internally and do not consider the performance of the competitors in the same industry or the average performance within the industry.
According to Johnson and Kaplan (1987), companies tend to rely on accounting-based information that is appropriate for
1.0 Performance Measurement
In today’s advanced and rapidly changing manufacturing environment, operational performance measures are taking on ever-greater importance. It is due to the influences of worldwide competition, just-in-time inventory management, and an emphasis on product quality and customer service.
A multidimensional conceptualization of organizational performance related predominately to stakeholders, heterogeneous product market circumstances, and time. A review of the operationalization of performance highlights the limited effectiveness of commonly accepted measurement practices in tapping this multidimensionality.
Market competition for customers, inputs, and capital make organizational performance essential to the survival and success of the modern business. Marketing, operations, human resources (HR), and strategy are all ultimately judged by their contribution to organizational performance. Organizations are heterogeneous in their resources and capabilities and how and where they choose to use them. Large organizations use both financial and nonfinancial performance measures but favor financial measures.
1.1 Financial Performance Measurement
Financial performance measures give little or no guidance to future performance since they do not include any measures relating to customers’ satisfaction and organizational learning. Furthermore, Eccles and Pyburn (1992) claim that financial performance measures are oriented internally rather than externally. A performance measurement and evaluation system involves comparing actual performance with targeted performance in terms of budgets or the past period’s performance. Both of them (target and measures) are developed internally and do not consider the performance of the competitors in the same industry or the average performance within the industry.
According to Johnson and Kaplan (1987), companies tend to rely on accounting-based information that is appropriate for
References: El-shishini , Hatem.(2001). Integrating financial and non-financial performance measures: state of the art and research opportunities. Tanta, Egypt: University of Huddersfield & Tanta University. W. Hilton, Ronald. (2009). Managerial accounting: Creating value in a dynamic business environment 8th ed. New York: The McGraw-Hill Companies. Brewer, P. C., Garrison, R. H., & Noreen, E. W. (2008). Introduction to managerial accounting 4th ed. New York: The McGraw-Hill Companies.