Performance metrics – NBC Institute

CSME – Nov 2019 – L2 – Q1 – Strategic Implementation

Discusses Fitzgerald and Moon’s building block model and applies it to Premier Insurance Plc.’s strategic performance evaluation, recommending new strategies based on the model.

Question

Premier Insurance Plc. (PIP) was incorporated in 2000. It commenced insurance business in 2001. 49% of the company’s equity was held by its foreign technical partners, with the remaining 51% held by Nigerians. The company’s technical agreement required that the technical partners produce the Managing Director while the Nigerian shareholders provide the Chairman and Deputy Managing Director. As a result of this arrangement, Mr. R. Stalwart emerged as Managing Director, Chief E. Acquah as Chairman, and Mr. D. Dede as Deputy Managing Director.

Business Outlook
The company’s premium and investment incomes were rising steadily until 2010. The company’s profits were further buoyed by rental income realized from its heavy investment in real estate. The company also enjoyed significant government patronage due to the strong connection of its chairman, who was a leader of the ruling party.

However, in 2010, the global economic crisis impacted the Nigerian economy, leading the technical partners to reduce their investment from 49% to 10%. This caused Mr. Stalwart to resign as Managing Director. Simultaneously, the loss of government support led to a dramatic drop in income from government and multinational business accounts. These factors, coupled with a slump in the real estate market, led to a significant decline in profits.

Re-organisation
Following the resignation of Mr. Stalwart, the new investors demanded a re-organisation of the company. Mr. Dede was appointed as the new Managing Director with the mandate to evaluate the company’s strategic performance and develop a strategy to improve its market performance.

Required:
(a) Discuss Fitzgerald and Moon’s building block model for analyzing performance management systems in service industries. (12 Marks)

(b) Apply the Fitzgerald and Moon building block model to evaluate the strategic performance of Premier Insurance Plc. (20 Marks)

(c) Summarize the outcome of the evaluation of the performance management system of Premier Insurance Plc. and recommend elements of a new strategy for the company based on the Fitzgerald and Moon building block model. (8 Marks)

Answer

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Tags: Performance Management, Performance metrics, Service Industries, Strategic Reorganization
Level: Level 2

Topic: Strategy implementation
Series: NOV 2019

BMF – May 2017 – L1 – SA – Q17 – Basic Management Functions

Multiple-choice question on situations where it is difficult to measure qualitative performance in quantitative terms.

Question

17. Which of the following options best describes a case where it may be extremely difficult to measure qualitative performance in quantitative terms?

A. ‘High quality’
B. ‘Being the ‘best’
C. ‘Brand recognition’
D. ‘Better than competitors’
E. ‘Meeting customer needs’

Answer

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Tags: Management, Performance metrics, Qualitative Performance
Level: Level 1

Topic: Basic Management Functions
Series: MAY 2017

MI – May 2024 – L1 – SA – Q7 – Costing Techniques

Tests understanding of the calculation method for efficiency ratios using standard and actual hours worked.

Question

Which of the following control ratios is given by standard hours produced divided by actual hours worked? A. Activity ratio
B. Overhead efficiency ratio
C. Volume ratio
D. Capacity ratio
E. Efficiency ratio

Answer

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Tags: Actual Hours, Control Ratios, Efficiency Ratio, Performance metrics, Standard Hours
Level: Level 1

Topic: Costing Techniques
Series: MAY 2024

MA – May 2020 – L2 – Q1 – Performance Analysis

Analyze and discuss VAR's performance under financial performance, internal efficiency, and external effectiveness for the year ended 31 December 2016.

Question

Volta Advisory Ltd (VAR) began trading on 1 January 2014. It specializes in the provision of expert advice to clients in accountancy, taxation, and regulatory compliance. It has a team of professional advisors, each specializing in one of these three areas of advice.

VAR has a target for delivering its services to clients promptly. From the time the client asks for advice, VAR undertakes to provide a formal report to the client within 10 working days. The following information relates to the financial year ended 31 December 2016.

i) The professional advisors are budgeted to work 220 days each year. They charge GH¢1,400 per day to new clients and GH¢1,200 to established clients.

ii) As a marketing measure intended to win new business, the advisors also give consultations to potential clients on a ‘no fee’ basis. These consultations, which are budgeted to take one day each, are accounted for as business development costs in the marketing budget.

iii) The professional advisors are also required to attend some ‘workshops’ with new clients who are having difficulties with implementing the advice that they have been given by VAR. These workshops, which are also given on a ‘no fee’ basis, are budgeted to last two days.

iv) VAR also has a help desk to provide client support. It responds to telephone and e-mail inquiries from all new and established clients.

v) The team of professional advisors is exactly 50. It is a policy of VAR to limit the team to 50, regardless of the volume of demand for its services.

vi) All professional advisors are paid a salary of GH¢100,000 per year. In addition, they are entitled to share equally in an annual bonus. The bonus is 50% of the amount by which fee income generated exceeds budget minus the revenue foregone as a result of having to give workshops for clients. This revenue foregone is assessed at a notional daily rate of GH¢1,200 per advisor/day.

vii) Operating expenses of the business, excluding salaries of the advisors, were GH¢3,100,000 in 2016. The budget for these expenses was GH¢2,800,000.

Other information

	Budget 2016	Actual 2016
Professional advisors, by category:
Accounting	15	10
Tax	20	20
Compliance	15	20
Enquiries about seeking new advice:
New clients	2,600	2,200
Established clients	4,000	3,700
Number of chargeable client days:
New clients	2,600	2,750
Established clients	5,100	5,500
Average client days per job	4	4
Mix of chargeable client days:
Accounting	1,155	1,650
Tax	1,540	3,300
Compliance	1,155	3,300

The following are actual results for each of the three years 2014-2016:

	2014	2015	2016
Number of clients	160	248	347
Number of complaints from clients	50	75	95
Number of accounts in dispute	10	7	5
Support desk: percentage of calls resolved	86%	94%	97%
Percentage of jobs completed within 10 days	90%	95%	98%
Average time to complete a job (days)	12.6	10.7	9.5
Chargeable client days	7,200	7,750	8,250
Number of consultations (business development)	50	100	150
Number of workshops given	110	135	165
Revenue (GH¢000)	8,920	9,740	?
Net profit (GH¢000)	1,740	1,940	?

Required: Using the information provided, analyze and discuss the performance of VAR for the year to 31 December 2016, under the following headings:

a) Financial performance and competitiveness;
b) Internal efficiency;
c) External effectiveness.

Answer

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Tags: Competitiveness, External effectiveness, Financial Performance, Internal efficiency, Performance metrics
Level: Level 2

Topic: Performance analysis
Series: MAY 2020

CSME – Nov 2019 – L2 – Q1 – Strategic Implementation

Discusses Fitzgerald and Moon’s building block model and applies it to Premier Insurance Plc.’s strategic performance evaluation, recommending new strategies based on the model.

Question

Required:
(a) Discuss Fitzgerald and Moon’s building block model for analyzing performance management systems in service industries. (12 Marks)

(b) Apply the Fitzgerald and Moon building block model to evaluate the strategic performance of Premier Insurance Plc. (20 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Performance Management, Performance metrics, Service Industries, Strategic Reorganization
Level: Level 2

Topic: Strategy implementation
Series: NOV 2019

BMF – May 2017 – L1 – SA – Q17 – Basic Management Functions

Multiple-choice question on situations where it is difficult to measure qualitative performance in quantitative terms.

Question

17. Which of the following options best describes a case where it may be extremely difficult to measure qualitative performance in quantitative terms?

A. ‘High quality’
B. ‘Being the ‘best’
C. ‘Brand recognition’
D. ‘Better than competitors’
E. ‘Meeting customer needs’

Answer

Find Related Questions by Tags, levels, etc.

Tags: Management, Performance metrics, Qualitative Performance
Level: Level 1

Topic: Basic Management Functions
Series: MAY 2017

MI – May 2024 – L1 – SA – Q7 – Costing Techniques

Tests understanding of the calculation method for efficiency ratios using standard and actual hours worked.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Actual Hours, Control Ratios, Efficiency Ratio, Performance metrics, Standard Hours
Level: Level 1

Topic: Costing Techniques
Series: MAY 2024

MA – May 2020 – L2 – Q1 – Performance Analysis

Analyze and discuss VAR's performance under financial performance, internal efficiency, and external effectiveness for the year ended 31 December 2016.

Question

i) The professional advisors are budgeted to work 220 days each year. They charge GH¢1,400 per day to new clients and GH¢1,200 to established clients.

iv) VAR also has a help desk to provide client support. It responds to telephone and e-mail inquiries from all new and established clients.

v) The team of professional advisors is exactly 50. It is a policy of VAR to limit the team to 50, regardless of the volume of demand for its services.

vii) Operating expenses of the business, excluding salaries of the advisors, were GH¢3,100,000 in 2016. The budget for these expenses was GH¢2,800,000.

Other information

	Budget 2016	Actual 2016
Professional advisors, by category:
Accounting	15	10
Tax	20	20
Compliance	15	20
Enquiries about seeking new advice:
New clients	2,600	2,200
Established clients	4,000	3,700
Number of chargeable client days:
New clients	2,600	2,750
Established clients	5,100	5,500
Average client days per job	4	4
Mix of chargeable client days:
Accounting	1,155	1,650
Tax	1,540	3,300
Compliance	1,155	3,300

The following are actual results for each of the three years 2014-2016:

	2014	2015	2016
Number of clients	160	248	347
Number of complaints from clients	50	75	95
Number of accounts in dispute	10	7	5
Support desk: percentage of calls resolved	86%	94%	97%
Percentage of jobs completed within 10 days	90%	95%	98%
Average time to complete a job (days)	12.6	10.7	9.5
Chargeable client days	7,200	7,750	8,250
Number of consultations (business development)	50	100	150
Number of workshops given	110	135	165
Revenue (GH¢000)	8,920	9,740	?
Net profit (GH¢000)	1,740	1,940	?

Required: Using the information provided, analyze and discuss the performance of VAR for the year to 31 December 2016, under the following headings:

a) Financial performance and competitiveness;
b) Internal efficiency;
c) External effectiveness.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Competitiveness, External effectiveness, Financial Performance, Internal efficiency, Performance metrics
Level: Level 2

Topic: Performance analysis
Series: MAY 2020

Question Tag: Performance metrics

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CSME – Nov 2019 – L2 – Q1 – Strategic Implementation

Discusses Fitzgerald and Moon’s building block model and applies it to Premier Insurance Plc.’s strategic performance evaluation, recommending new strategies based on the model.

BMF – May 2017 – L1 – SA – Q17 – Basic Management Functions

Multiple-choice question on situations where it is difficult to measure qualitative performance in quantitative terms.

MI – May 2024 – L1 – SA – Q7 – Costing Techniques

Tests understanding of the calculation method for efficiency ratios using standard and actual hours worked.

MA – May 2020 – L2 – Q1 – Performance Analysis

Analyze and discuss VAR's performance under financial performance, internal efficiency, and external effectiveness for the year ended 31 December 2016.

CSME – Nov 2019 – L2 – Q1 – Strategic Implementation

Discusses Fitzgerald and Moon’s building block model and applies it to Premier Insurance Plc.’s strategic performance evaluation, recommending new strategies based on the model.

BMF – May 2017 – L1 – SA – Q17 – Basic Management Functions

Multiple-choice question on situations where it is difficult to measure qualitative performance in quantitative terms.

MI – May 2024 – L1 – SA – Q7 – Costing Techniques

Tests understanding of the calculation method for efficiency ratios using standard and actual hours worked.

MA – May 2020 – L2 – Q1 – Performance Analysis

Analyze and discuss VAR's performance under financial performance, internal efficiency, and external effectiveness for the year ended 31 December 2016.

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CSME – Nov 2019 – L2 – Q1 – Strategic Implementation

Discusses Fitzgerald and Moon’s building block model and applies it to Premier Insurance Plc.’s strategic performance evaluation, recommending new strategies based on the model.

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BMF – May 2017 – L1 – SA – Q17 – Basic Management Functions

Multiple-choice question on situations where it is difficult to measure qualitative performance in quantitative terms.

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MI – May 2024 – L1 – SA – Q7 – Costing Techniques

Tests understanding of the calculation method for efficiency ratios using standard and actual hours worked.

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MA – May 2020 – L2 – Q1 – Performance Analysis

Analyze and discuss VAR's performance under financial performance, internal efficiency, and external effectiveness for the year ended 31 December 2016.

You're reporting an error for "MA – May 2020 – L2 – Q1 – Performance Analysis"

CSME – Nov 2019 – L2 – Q1 – Strategic Implementation

Discusses Fitzgerald and Moon’s building block model and applies it to Premier Insurance Plc.’s strategic performance evaluation, recommending new strategies based on the model.

You're reporting an error for "CSME – Nov 2019 – L2 – Q1 – Strategic Implementation"

BMF – May 2017 – L1 – SA – Q17 – Basic Management Functions

Multiple-choice question on situations where it is difficult to measure qualitative performance in quantitative terms.

You're reporting an error for "BMF – May 2017 – L1 – SA – Q17 – Basic Management Functions"

MI – May 2024 – L1 – SA – Q7 – Costing Techniques

Tests understanding of the calculation method for efficiency ratios using standard and actual hours worked.

You're reporting an error for "MI – May 2024 – L1 – SA – Q7 – Costing Techniques"

MA – May 2020 – L2 – Q1 – Performance Analysis

Analyze and discuss VAR's performance under financial performance, internal efficiency, and external effectiveness for the year ended 31 December 2016.

You're reporting an error for "MA – May 2020 – L2 – Q1 – Performance Analysis"

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