MGMT 4000 Chapter Notes - Chapter 12: Inventory Turnover, Communication Problems, Economic Value Added
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Measuring performance: performance is the end result of activity, select measures to assess performance based on organizational unit to be appraised and the objectives to be achieved. Continue: take corrective action, back to step 3. Enterprise risk management (erm: corporate-wide, integrated process for managing the uncertainties that could negatively or positively influence the achievement of the corporation"s objectives. So far, this is the same approach taken in calculating eva: using the current stock price, total the value of all outstanding stock, adding it to the company debt. If the company"s market value is greater than all the capital invested in it, the firm has a positive mva meaning that management has created wealth. In some cases, however, the market value of the company is actually less than the capital put into it, which means shareholder wealth is being destroyed. Using benchmarking to evaluate performance: benchmarking process usually involves: