Managing Organizational Performance

Achieving and maintaining competitive advantage requires more than strategic insights. Successful managers of today need an in‐depth understanding of financial and non‐financial performance indicators, solid knowledge of how to drive strategy down to operational levels, and skills to deploy and manage multiple control systems to effectively steer their organizations. It is these topics that will be discussed in this core course. Our focus will revolve around the following question: How to manage an organization to successfully executes strategy?

You will learn about performance management concepts and techniques that are commonly used in organizations today. However, these techniques should not be understood only in terms of their technical functioning, but also in their relationship to the organization’s context (e.g. its design and environment). Therefore, in this course, we will also learn how performance measurement techniques have different (sometimes unintended) effects on organizational life and on, more broadly, different external stakeholders.

There are five main takeaways for this class:

1. Understand how and why a company is usually divided into different responsibility centres (e.g. profit centres, cost centres, revenue centres, and investment centres).
2. Learn the principles through which organizational units negotiate and set the prices for the goods and services transferred within the organization.
3. Understand how to use the budget to plan and control business performance.
4. Identify the uses, benefits, and limitations of financial measures such as return on investment (ROI) and residual income.
5. Learn how to manage risk and operationalize the organization’s strategy through a more comprehensive view of performance measurement (e.g., Risk Maps and Balanced Scorecard).