Lecture 9 - Lehrstuhl für Controlling - Technische Universität München
Lecture 9 - Lehrstuhl für Controlling - Technische Universität München
Lecture 9 - Lehrstuhl für Controlling - Technische Universität München
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<strong>Technische</strong> <strong>Universität</strong> <strong>München</strong><br />
Financial and non-financial value drivers – identifying the Key<br />
Performance Indicators (KPIs) (2/3)<br />
<br />
Some shortcomings of financial drivers:<br />
• Short-term performance might be achieved at the cost of the long run<br />
(maximizing the present value of future EVAs must be the objective)<br />
• “milking assets”, reduced production quality at the cost of customer satisfaction<br />
and future revenues etc.<br />
• Financial ratios are of historical nature (lagged indicators)<br />
<br />
Non-financial drivers might help to cope with these problems:<br />
• Leading indicators of future EVA like market share, customer satisfaction,<br />
product innovation, the number of new customers or employee skills and<br />
employee satisfaction…<br />
• …might be more under control of operating managers and<br />
• …capture problems quicker (customer complaints as signal of problems of<br />
product quality or distributional problems).<br />
Value-Based Management: <strong>Lecture</strong> 9 12<br />
© Gunther Friedl – SS 2013
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