Strategic Audit Measurement Methods
There are several generally accepted methods for measuring organizational performance. One way for categorizing these methods divides into the distinct types: qualitative and quantitative. However, a few methods do not fall neatly into one or other of these categories but rather are a combination of both types.
Qualitative Organizational Measurements
There is no universally endorsed list of critical questions designed to reflect important facets of organizational operations. However, several that might be useful to the practicing managers are presented below.
Sample Questions to be asked for Qualitative Organizational Measurement
- Are the financial policies with respect to investment… dividends and financing consistent with opportunities likely to be available?
- Has the company defined the market segments in which it intends to operate sufficiently specifically with respect to both product lines and market segments? Has it clearly defined the key capabilities needed for success?
- Does the company have a viable plan for developing a significant and defensible superiority over competition with respect to these capabilities?
- Will the business segments in which the company operates provide adequate opportunities for achieving corporate objectives? Do they appear as attractive as to make it likely that an excessive amount of investment will be drawn to the market from other companies? Is adequate provision being made to develop attractive new investment opportunities?
- Are the management, financial, technical and other resources of the company really adequate to justify an expectation of maintaining superiority over competition in the key areas of capability?
- Does the company have operations in which it is not reasonable to expect to be more capable than competition? If so, can the board expect them to generate adequate returns on invested capital? Is there any justification for investing further in such operations, even just to maintain them?
- Has the company selected business that can reinforce each other by contributing jointly to the development of key capabilities? Or are there competitors that have combinations of operations which provide them with an opportunity to gain superiority in the key resource areas? Can the company's scope of operations be revised so as to improve its position vis-à-vis competition?
- To the extent that operations are diversified, has the company recognized and provided for the special management and control systems required?