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Introduction
Evaluation of business performance is very important because it gives managers an idea regarding progress in their business. Organisations may end up failing if managers do not take time to evaluate their performance. This may be due to the fact that workers misuse funds making it difficult for the organisation to run its operations. Therefore, organisations should make sure that they develop strategies aimed at evaluating their progress every often.
The process should target everyone in the organisation in order to ensure that they all work towards achievements of the set goals. For instance, the production department should be evaluated individually to find out how they are progressing. This is very important because failure of an organisation may be originating from a section of its departments (Barnes 2008, p. 107). Therefore, evaluation is very important because it can highlight such areas hence calling for improvement.
External environment has to be evaluated in order to show how the organisation is performing in respect to it. This means that customers and other organisations that affect an organisation’s business should not be left out of the analysis procedure. Organisations should try their best to make sure that they develop strategies aimed at improving their performance. Delivery of services and products to the market should be evaluated to identify areas that need more funding.
Organisations may be forced by circumstances to lay off employees in order to improve their performance. Such decisions can only be made after evaluating their current progress. Performance in any organisation is determined by various factors, and they have to be evaluated. In case of any improvements that have to be made, managers should move swiftly to implement the right processes aimed at making operations better.
Literature Review
The Mckinsey 7S Framework
For any organisation to be successful, they must consider all seven aspects of Mckinsey scorecard. For example, in the banking field organisations should emphasize on strategies guiding their operations. They should make sure that their resources are put into good use hence maximizing on their profitability. Customers within banking halls should be treated with hospitality hence making them feel that they deserve to bank with the institution.
Therefore, human resources should be utilised wisely to make sure that the organisation benefits from their services (Lennick and Kiel 2007, p.64). Tellers should be ready to handle customers in a wise and swift manner to ensure that they do not get tired while waiting for services. In case clients have issues with their bank accounts, customer care personnel should be able to offer assistance to the best of their ability and in as little time as possible.
This is very important because it builds trust in customers making them feel that they deserve to be in the bank where their problems are prioritised. There should be strategies aimed at reaching customers from various parts in order to increase customer base for the bank. This means that part of bank’s profits and other resources should be used in creating awareness among customers in the market. In addition, the bank should come up with strategies aimed at cautioning its activities against threats posed by competitors.
Structure of organisation’s departments is vital since it helps in making working conditions better hence increasing profitability. This means that the bank should make sure that the chain of communication from managers to other departments is enhanced. This is important because the finance personnel will remain in good terms with accountants and the human resource personnel.
Respect and understanding should prevail making it easy for individuals in these departments to work hand in hand hence making the business a success. The chain of command should not be so complex since the organisation deals with money. This makes management easy because transactions can be easily traced within each department making corrections of possible errors quite easy.
The system is another aspect that must be considered carefully for any business to succeed. The bank should ensure that all its processes and procedures are designed in a way such that they should eliminate chances of possible errors. For instance, the procedure of cash reception from customers should be in a way such that tellers understand.
This means that any teller on duty should be able to understand how customer data is recorded to make sure that nothing is misreported leading to errors during accounting. Bank’s routines must be observed in order to check areas where things may be going in the wrong direction (Lundeberg, Mårtensson and Mähring 2006, p. 95). This means that customers must be taken through the right procedure when acquiring loans.
This helps to caution the bank from fraud where it might end up losing a lot of money to conmen. For instance, people should be required to submit several testimonials to make sure that they are genuine individuals before accessing bank loans. This means that the system should ensure that nobody is exempted from following the process required by the bank to obtain any service. In addition, people may be required to produce their original identity cards before withdrawing money from their bank accounts.
Banks should ensure that they have competent staff. This is vital because Banks deal with money hence calling for people with good ethics in order to avoid temptations of stealing huge sums of money from such institutions. Banks ensure that they take their employees through trainings to equip them with necessary skills required to run operations of their institutions.
In addition, the bank’s staff should be compensated properly in order to motivate them to work harder. Coordination among employees of a bank is vital in order to ease their work during balancing of balance sheets. This means that employees play their roles bearing in mind that their colleagues in other department will have to use the information that they record. Therefore, they try to minimise errors to make work easy for their colleagues.
The Style of the organisation refers to their cultural ways of conducting their business. Management styles should be in a way such that they focus on attainment of organisational goals. For instance, banks’ managers should maintain practices aimed at expanding their market in order to remain profitable (Schutta 2006, p. 45). This means that they should encourage marketing to attract more customers hence increasing their customer base. This translates to increase in profits since much number of customers transacting business with the bank increases.
Skills are very important for any organisation since they help staff to run operations effectively. This means that core competencies in any organisation should be respected and supported by bank managers. For instance, accountants and finance officers should be very competent in order to caution the bank from any loss or other risks posed by changes in the economy.
The bank should make sure that it recruits people with adequate knowledge to make sure that they remain focused, and this leads to increase in profitability. If a banking institution relies on incompetent personnel to advice on forex, they may be at risk of shutting down due to incurred loss (Willey 2010, p. 87). This happens when changes in the world economy hits on the institution unaware leading to huge loss.
Balanced Scorecard (BSC)
Balanced score card is a method of evaluating business performance based on both internal and external environments. This means that, besides financial measures used by business, customers, business processes and learning measure are used. In financial measures, one uses operating income among other finances involved in the banking business. This is very important since organisations have to make sure that they minimise cost and maximize profits in order to remain profitable.
On the perspective of customers, one should consider customer satisfaction. This is where bank managers have to find out how their customers respond to services offered by bank staff. In case of complaints from customers, the management should be swift to improve areas in subject to boost customer satisfaction (Roper 2008, p. 57). In addition, the balanced scorecard evaluates business perspective, which includes cost involved and the quality.
This means that organisations should ensure that they monitor total costs involved in making their operations succeed and the quality of output. Finally, learning and growth perspective involves employee satisfaction, employee retention and other aspects of human resource department. This is vital because the bank should make sure that its workers are comfortable in order to maximise their productivity. This means that they should be given a friendly working environment together with reasonable compensation.
Method of Investigation
Business performance can be evaluated using various methods hence organisation’s managers should come up with methods that suit their businesses most. For instance, organisations may consider using feedbacks from customers as a method of evaluating their progress.
This means that they should come up with strategies aimed at collecting information from customers regarding their success. Customer feedbacks are very vital as they help managers to know how customer satisfaction is achieved through what they say about their products. For instance, people have various comments regarding products that they use in their daily lives.
They give genuine feedbacks concerning those products hence helping organisations to know how well they address customer needs. This method is very effective because organisations learn from their customers since they use their products (Singh 2004, p. 67). Customer information reflects at all times what they get from products provided by organisations in the market.
Organisations may consider using their financial statements to evaluate their performance. Every business transaction has to be recorded, and this provides a good evaluation grade for the organisation. The accounting department should make sure that all proceedings are recorded in accordance with principles of accounting. This helps them to analyse the organisation’s expenditure and compare them with revenues generated.
This is very important in indicating performance of any institution because accountants just try to work out on previous events aimed at showing whether an organisation is operating at loses or profits. This method of investigating performance is very effective because it details financial abilities of organisations. Organisations work with the aim of maximizing profits and cutting costs, therefore, this kind of analysis can be very important because business success can be evaluated on the basis of financial stability.
In addition, organisations may decide to investigate their performance by use of their employees. This happens where employees are asked questions regarding what they do and how what they feel about organisations’ progress. In fact, workers may be at a position to give useful information regarding their work places (Neely 2002, p. 87). This includes providing details concerning how well organisations meet their set objectives, and this helps organisation to know exactly what need to be improved in order to attain maximum production.
Business performance targets various aspects which include treatment of employees. This is because an organisation, which does not accord the necessary information to employees as outlined in its rules and regulations seem to have failed. Therefore, a successful organisation should be able to give what it promised to both its workers and customers, as well.
Critical Analysis and Evaluation: Frameworks Application
The Mckinsey 7S Framework
This framework is very important since it highlights all vital elements of an organisation. In fact, the operations of any bank following the 7s remain perfect. This is because the structure works in favor of the organisation together with its employees and workers. In addition, the framework addresses issues regarding all parties involved in the bank.
For instance, skills required by the management when recruiting employees to make sure that they have most competent employees. In addition, the style is considered, as well. This is vital as it helps only those productive behaviors to be retained for success of the institution.
Balanced Scorecard (BSC)
The balanced scorecard extends its responsibilities from internal operations of any organisation to the external environment. This is where managers have to consider their customers and other parties involved in their banking business (Singh 2004, p. 57). For instance, employee retention and farewell is considered to ensure that they do not have any reason to complain. This means that their issues are addressed accordingly hence making them remain productive at all times.
Comparison with an External Agency
This organisation can compare with external organisations in a great way. For instance, quality is maintained causing customer satisfaction. The organisation puts customer interests first hence giving it an opportunity to remain profitable hence successful.
In terms of performance, the organisation is in the same level with other organisation, which leads in the industry (Aziza and Fitts 2008, p. 103). This means that the organisation ensures that its quality remains at par with that of other players in the industry hence making it possible for them to perform well.
Unlike most organisations in the same industry, this company ensures that they give their employees the first priority since they understand their importance in improving the overall performance. This has been achieved by ensuring that employees enjoy friendly working environments.
In addition, they make sure that employees get paid well hence motivating them to work extra hard in order to make an organisation’s operations a success. The organisation involves all its employees in decision making process hence making sure that every decision has been approved by all in the organisation.
Synthesis of the Concepts and Conclusion
The Bank of America uses both concepts in making sure that their operations remain profitable and satisfactory to their customers. In fact, the bank emphasises on customer and employee satisfaction, in addition, the structure was considered because it provided a perfect chain of communication (Neely 2007, p.35).
Management behaviors were reviewed so often to make sure that only the good ones remained functional. Finally, everyone in the organisation should join hands to make sure that they achieve all goals hence helping the organisation to improve in terms of its performance. Organisations should embrace the spirit of brotherhood since this helps them to achieve their set goals at all times.
References
Aziza, B & Fitts, J 2008. Drive Business Performance: Enabling a Culture of Intelligent Execution. John Wiley & Sons, New York.
Barnes, D & Hinton, M 2008. The Benefits of E-Business Performance Measurement Systems. Elsevier, London.
Lennick, D & Kiel, F 2007. Moral Intelligence: Enhancing Business Performance and Leadership Success. Pearson Prentice Hall, New York
Lundeberg, M, Mårtensson, P & Mähring M 2006. It & Business Performance: A Dynamic Relationship. Utbildningshuset/Studentlitteratur, London.
Neely, A D 2002. Business Performance Measurement: Theory and Practice. Cambridge University Press, Sydney.
Neely, A D 2007. Business Performance Measurement: Unifying Theories and Integrating Practice. Cambridge University Press, Sydney.
Roper, G 2008. Business Performance. VDM Verlag, London.
Schutta, J T 2006. Business Performance Through Lean Six Sigma: Linking The Knowledge Worker, The Twelve Pillars, And Baldrige. ASQ Quality Press, New Jersey.
Singh, S 2004. Market Orientation, Corporate Culture and Business Performance. Ashgate Publishing, Ltd, Michigan.
Willey, B 2010. Business Performance Measurement and Management. Springer, London.
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