Corporate Performance Management

Written by Jacey Harmon
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Large corporations who have publicly traded stock are closely measured against their competitors. The market will gauge the company's performance, both internal and external, and price the stock accordingly. The goal of any corporation is to have their share price grow for investors. In order to achieve that goal, the corporation must be able to grow and maintain that growth at a better rate than their competition.

Revenues from product sales will drive earnings and share prices higher. To maintain profitability the company must be able to manage its strong growth through efficiency in its operation. If a company can not maintain sound profit margins, revenue growth will not translate into higher earnings and share prices. The best way for a corporation to maintain profitability is to consistently review and analyze the performance of the business, competitors and market place.

Corporate Performance Management

Corporations need to pay attention to the internal functions of the company. Wasteful employee spending, such as private use of corporate funds, can reduce profitability. Extra expenses like buying identical supplies from multiple vendors may cause higher operating costs than necessary. A corporation that reviews and gauges the performance of internal finances will likely find wasteful spending that is hurting margins.

Measuring employee productivity will also help the business improve profitability. Analyzing employee production rates will allow businesses to identify processes that may not be working and recognize good and bad employees. Analyzing external forces such as customer buying trends and economic growth will help the corporation properly place advertising campaigns and new product launches.

There are a plethora of tools available for corporations to measure their performance. Corporations will generate a flood of data that can be turned into corporate action. Data warehouses that include databases and analysis software will facilitate the analysis and use of raw data. Software programs can visually express the results of a specific study, allowing easy identifications of trends that will likely go unnoticed. A corporation that does not review its performance will lose its competitive edge to companies that do take a pro-active approach to performance management. Corporations that lose competitiveness in the market place will see their share price and investors suffer.


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