In this method managers from all the levels of the organization, from regional settings to the CEOs can utilize the tools of this framework to derive their unit performance. This method has proved to be a powerful tool in the management and monitoring of the unit`s strategy.
Managers can therefore communicate the cause-effect relationship which delivers the preposition of the values of their units. This method thus develops both a template and a form of communication which can be used for decimating information involving the creation of value.
According to Kaplan and Norton (2006), it is through a mix of operational perspectives that a company can succeed in its operations currently in the world. Financial, customer, process, learning and growing perspectives do affect corporate strategy.
In the financial perspective, companies can bring about an enterprise value through the allocation of resources while using an effective method (Kaplan and Norton 2006, p. 103). The aims of resource allocation can range from corporate governance, merging and acquisition of new businesses and negotiation with external stakeholders such as governments, other businesses, shareholders and suppliers.
If this activity is done in the best way possible then a company will have created strong financial strategies. By doing so a company will have a strong financial base that will enable it to grow and expand the size of its business (Fitzsimmons, 2000 p. 14).
In the consumer perspective companies which produce the same goods or offer the same services can integrate their services so as to lower the prices of their products (Kaplan and Norton 2006, p. 104). This moves aim at making their services or products to be affordable by consumers.
Get your 100% original paper on any topic done in as little as 3 hours Learn More This move creates corporate synergies across multiple businesses in the market. In doing so the businesses and consumers will have goods and services at better prices and at a greater convenience than what an individual competitor would have offered (Wheelwright 2001, p. 122).
Hilton Hotel and McDonalds for example have entered in this form of agreement to offer the same form of proposition in their chains of hotels and restaurants all over the world where they are found (Kaplan and Norton 2006, p. 104).
The third method in the balanced scorecard perspective is called the process perspective. In this method, corporate synergies can save a lot of money by reducing their costs through the sharing of costs such as manufacturing, transportation, research, storage, advertisement and purchases (Kaplan and Norton 2006, p. 104). This can only be possible if and only if these processes are common for the companies involved.
In the past, businesses had a competitive advantage by owning relevant resources which other companies in the industry did not have. However, in the present times most companies are consolidating together to share costs of conducting common processes even though they are competitors (Swamidass and Newell, 1997 p. 515).
The learning and growing perspective enable corporations to partner up and develop methods to recruit personnel in the industry and come up with refreshed knowledge and skills which will enable the industry to grow and develop in the right direction.
These activities include recruiting and training of personnel, coming up with ideas and innovation and the use of IT in the operation of businesses. Currently, intangible assets account for around 80% of a company’s value therefore companies should develop synergies that will enhance the development of the human capital (Kaplan and Norton 2006, p. 104).
References Fitzsimmons, J.A. (2000) Service Management: Operations, Strategy, and Information Technology. Boston. McGraw-Hill
We will write a custom Assessment on Management Strategic Operations specifically for you! Get your first paper with 15% OFF Learn More Kaplan, R.S. and Norton D.P. (2006) How to Implement a New Strategy without Disrupting Your Organization. Harvard Business Review 84 (3), 100-109.
Swamidass, P.M. and Newell, W.T. (1997) Manufacturing Strategy, Environmental Uncertainty and Performance. Management Science 33 (4), 509–524.
Wheelwright, S.C. (2001) Restoring Our Competitive Edge: Competing Through Manufacturing. New York.Wiley,
How Macroeconomics Affects on Remote Industry
Nursing Assignment Help Introduction The study of macroeconomics has become very important in the contemporary world of business and economic practices. Generally, macroeconomics involves decision made by households and firms (including government), more so in relation of how the scarce resources can be allocated in order to effectively carry out production, trade and consumption.
Viewed from a different perspective, the success of economic practices depend on the levels of demand and supply prevailing in a certain market environment, which tend to have influence on price level of products and the general consumers’ purchase behaviour.
Moreover, the effect of macroeconomic variables on the economy’s gross domestic product determines the success of an economy mainly in relation to employment levels, investment, inflation levels, and resource distribution among others.
An organization’s external environment is normally affected by the remote environment, the industry environment, and the operating environment, all of which are macroeconomic aspects that may in one way or another affect the profitability of an organization both in the short and long term.
In a national level, macroeconomic forces influence the level of government participation in economic activities as well as influencing government’s decisions pertaining to economy’s capital structure.
In this case, macroeconomic variables determine the level of gross national income of a country, which is usually measured by net worth of economic activities including production in the economy over a specific period of time, mostly one fiscal year.
One notable aspect of macroeconomics is the fact that economic growth rate tends to change frequently due to volatility of households’ living standards and changes in income distribution among different groups of people in a country.
Get your 100% original paper on any topic done in as little as 3 hours Learn More Moreover, given that it is not always possible to maintain equity and status quo in an economy, GNP tends to focus on measuring the scale of income and wealth inequalities in the country.
Therefore, it is worth noting that, as the GDP measures the economic value of all final goods and services in the economy in a fiscal year, it becomes a valuable determinant and indicator of a country’s economic status.
According to Barro (2008, pp 2), performance of the overall economy matters to the citizens of a country because it influences incomes, job prospects and prices; therefore, it is important for the government to understand how macroeconomics work. Generally, macroeconomics are usually characterized by various variables that include among others the “health of an economy: aggregate output or income, the unemployment rate, the inflation rate, and the interest rate” (Barro, 2008).
First, unemployment is a common phenomenon in most countries; however, the level of unemployment differs from one country to another depending on the number of non-working labor force in a country. In simple terms, labor force includes the working population as well as people who are in process of hunting for jobs; however, people who are voluntarily unemployed (either formally or informally) are disqualified from this definition of labor force. Nevertheless, it is impossible to bring down the rate of unemployment to zero in an ideal economy.
The second macroeconomic variable is inflation rate, which is simply described as the tendency of general price levels rising relative to the production capacity in the economy over a given period of time. In other words, there is a high supply of money in the hands of households and firms in the economy thus increasing the aggregate demand beyond the aggregate supply, thus forcing prices of goods and services to rise.
One significant measure of inflation is the consumer price index and producer price index applicable to households and firms for the purchase of consumer goods and producer goods respectively. In addition to this, the GDP price deflator is also used as an inflation measure particularly on national and public goods and services.
The third variable of macroeconomics is the health of the economy, which is measured by the economy’s GDP. Normally, the production of goods and services usually generates income within the specific period of production, thus GDP measures the economic value of products at the prevailing market prices during the period under consideration; however, recycled goods are eliminated from this calculation.
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