BUS 322 Lecture Notes - Lecture 1: Customer Retention, Profit Margin, Chipset

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 322
• Professor: Mahmoudian Fereshteh

Document Summary

Recognize and recommend lead indicators in the areas of organizational learning and growth, business production process efficiency, and customer value. Explain the importance of lead indicators in building a balanced scorecard for communication, motivation, and evaluation. Explain the benefits and costs of a balanced scorecard. Explain how organizations implement a balanced scorecard of performance measures. Understand the key principles of performance-based incentive systems. Evaluate the advantages and disadvantages of alternative features of incentive systems. Lagging indicators measure final outcomes of management plans. Though lag indicators are useful for evaluation of financial results (e. g. , profitability), lead indicators are the measures needed to ascertain that profit outcomes occur as expected. Lead and lag indicators are related to each other. Lead indicators that are performance measures at one stage of an organization"s value chain may be lag indicators in another stage of the value chain. For instance, a lead indicator may be customer satisfaction for an existing product.