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WK3 Understanding Performance - Coggle Diagram
WK3 Understanding
Performance
Performance
Effectiveness
Ability to attain goals
Efficiency
Ability to generate outputs
with less resources
Competitive Advantage
Source of achieving better
performance than others
Can be affected by other factors
Is relative to the context
Can be imitated/replicated
by others
Sometimes only applies in
a team context
May need to be maintained
(e.g training)
See OneNote Week3 Notes
for Various Definitions
Value Creation
Company combines inputs/materials to
offer good or service with perceived benefit
that is higher than cost to produce
Maximising
Shareholder Value
Milton Friedman
US 1970
Hill et al. (2014, p. 6)
WK3 Models &n Concepts
Risk capital not loan
not repaid
Managers committed to
increasing shareholder value
by balancing short and long
term performance
Short Term
Performance Measures
ROE - Return on equity
Profit / Equity X 100
ROCE - Return on capital employed
Operating profit / Equity employed X 100
ROS - Return on sales
Operating profit / sales X 100
AUR - Asset utilisation ratio
Sales / Capital employed
Long Term
Performance
Profit Growth
Growth of net profit
over time
Market Value
Share price X Number
outstanding shares