ENG 4339 Lecture Notes - Lecture 9: Balanced Scorecard, Performance Indicator, Marketing Effectiveness
Document Summary
The total business performance indicator is a quantitative measure of the executive team"s ability to effectively manage the resources of the firm. It considers both the historical performance of the firm as well as how well the firm is positioned to compete in the future. As such, it measures the action potential of the firm. The index employs what is called a balanced scorecard to measure the executive team"s performance. The most important measure is the team"s financial performance, and thus its ability to create wealth for the investors. However, the focus on current profits has caused many executives to stress the present at the expense of the future. The long-term viability of the firm requires that the executive team be good at managing not only the firm"s profitability, but also its marketing activities, production operations, human resources, cash, and financial resources. The management team must also invest in the future.
