Unit 3 Management for Strategic Performance Assignment Sample

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Task 1 Business Report

Strategic Management Accounting and Techniques

Shell Oman Marketing Company SAOG has had some problems that affect its performance now, for example, the restrained margins and the rise of operational costs that are shown by its 37% decline in comprehensive income in 2023. Sustainability internally is threatened by increasing operating costs, adjusting impaired trade receivables, and the need to diversify its sources of revenue. It is pressurized externally by the volatility in the prices of aviation fuel and the relatively few infrastructure projects taking place in Oman. In exploring solutions, students use assignment writing services in UK to better understand performance management strategies. As for these challenges, it is possible to point to the usage of SMA tools which can facilitate performance measurement and strategic decisions. Strategic performance management ensures that aims and objectives provided to the employees and the expected workings produced are in line with those of the company facilitating efficiency. Methods such as benchmarking help Shell Oman to measure its performance against competitors and set achievable goals and objectives. Furthermore, the company can maintain Balanced Scorecards to control KPIs where necessary; these include Financial Measures and Customer Measures among others to enable wide observation of events(Anderson & Johnson, 2021). Lastly at the operational level, variance analysis can help in identifying specific areas in which costs are exceeding or falling short of the budgets so that one can pursue specific measures to control such costs(Brown, Jones & Smith, 2020).

Unit 3 Management for Strategic Performance Assignment Sample

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Impact of External Factors on Performance Management

Shell Oman Marketing Company SAOG has its operations conducted in an environment that is shaped by external factors affecting performance management. Similar to the PESTEL analysis, political stability is important in Oman, as economic volatility owing to oil reliance and technology regarding change in energy production. Therefore, there are other factors, that have influenced the company's strategic context, namely social drivers: the increasing need for sustainable processes, and environmental stimuli: and the aim of Shell to achieve net-zero greenhouse gas emissions by 2050. Using SWOT analysis, it is possible to determine the key strengths of Shell Oman: strong position in the market and new attractive offers such as Shell V-Power on the one hand, and significant weak points of the firm: fluctuating margins and high operation costs on the other. The emerging scenario results in vigorous growth in renewable energy projects, the threats that organization faces include high levels of competition and fluctuating prices of oil in the global market. The firms' mobility and lubricants operations qualify as 'BCG Cash Cows' since Shell generates consistent revenues from it, while energy transition projects can be categorized as 'BCG Stars' since they are still growing rapidly. The idea of the Balanced Scorecard is that it measures four groups of indicators, namely financial, customer, internal process, and the learning dimension (Carter & Easton, 2019). In Shell Oman's case, using Porter's Five Forces, it is well established that bargaining power by Shell Oman is moderate among both suppliers and buyers; however, threats posed by new entrants in renewable energy sectors are alarming. According to Porter's Generic Strategies, differentiation should be achieved by stressing premium fuels and fresh renewable energy. Management for Strategic Performance plays a key role in helping Shell Oman prioritize resources and adapt its strategies to the changing market conditions (Chen & Lee, 2023).

The Importance Of Performance Hierarchy

The performance hierarchy is vital to Shell Oman Marketing Company SAOG since it connects plans systematically to the firm's execution. The source of the company's management is its mission statement “Powering life's journeys while supporting sustainable growth.” It is aimed at ensuring that the organization's objectives are congruent, motivate the stakeholders, and offer a framework for controlling performance. This mission clarifies priorities based on sustainability and innovation to guide key endeavours such as increasing renewable energy and increasing overall efficiency. Hence critical success factor (CSF) analysis is important in establishing the right performance measures that would ensure the achievement of this mission. CSFs for Shell Oman are customer satisfaction, operational effectiveness, and achieving Net Zero Emissions. They help in developing service performance targets like market share, the efficiency of the service stations, and lowering the carbon footprints. Because the mentioned measurements refer to CSFs, Shell Oman can measure organizational performance and assess the achievement of strategic objectives efficiently (Davis & Clark, 2020). Management for Strategic Performance ensures that each level of the hierarchy contributes to the company's overall goals and objectives (Davis & Clark, 2020). At the organizational level, strategic objectives are uniformly spread down in the organization so that every level reflects on the goal. For example, such vague goals and objectives as revenue increase, or sustainability can be converted into first-line targets, sales growth in mobility, or logistic efficiency. This tends to make certain that the activities of each of the teams fit into the general objective and mission (Fitzgerald & Moon, 2022).

The Need for Management Accounting Information

Management accounting information plays a big role when the business structure in Shell Oman Marketing Company SAOG changes mainly because it assists in the decision-making process, monitoring of performance, and planning. Whenever a structure shifts, for example by moving to a more decentralized organization structure or implementing a high stakes renewable energy investment, then there is the need for broadened financial and non-financial risk and return information. A major objective of management accounting is to present the correct cost information. For example, as Shell Oman expands its capacity for electric vehicle charging, management accounting defines capital and operating expenses, which allow an assessment of the profitability and sustainability of these investments. Likewise, the cost-benefit analysis can evaluate whether the scaled-up Shell Select stores will generate the expected gains. Also, cash flow during structural changes is facilitated by management accounting. In case Shell Oman was to obtain new supply chain facilities to improve the supply of logistics. In that case, the cash flow forecast defines the working capital which is necessary to maintain the continuity of operations. This data is essential when it comes to handling the financing sources and working on the liquidities. Control numbers and variations are again crucial while business restructuring is in progress (Kaplan & Norton, 2019). For example, variance analysis is well suited if Shell decides to transition from the sale of traditional fuel to low-CO2 products because it can help determine how actual results differ from the planned ones and what steps should be taken to address the issue (Kumar & Singh, 2023). Management for Strategic Performance ensures that accounting information is used effectively to support both short-term operations and long-term strategic goals (Kumar & Singh, 2023).

The Impact of Risk on Performance Management

Risk greatly affects performance measurement by altering goal attainment, process effectiveness, and resource utilization. Lapses such as volatile oil prices, political instabilities, and changing environmental laws may have random effects on the operation of Shell Oman Marketing Company SAOG. Strategic operations risk such as supply chain risks will cause delays in the shipment of products and this would not be best for the client or the business quarterly, monthly, weekly or daily sales figures. For instance, difficulties in procuring equipment for EV charging stations might slow Shell's energy transition plans and lower sustainability goals achievement. Foreign exchange risk affects the notes' profitability and cost control in specific areas due to extreme volatility. A rise in the cost of raw materials imported can lead to new operational costs which in turn can affect Shell's gross margin. Political and legal risks include increased regulation, for example in environmental standards, which means altering business processes, which in turn may be costly. Shell may potentially face either a loss of reputation or fines for failing to attain its emission reduction objectives, and these reduce financial and non-financial performance figures. Strategies and procedures namely risk control, risk containment, and risk minimization should be employed to sustain the best results (Langfield-Smith & Thorne, 2022).

Task 2 Notes

Performance management systems used in organisations

A PMS is key in managing employee performance about organizational strategies since it is a well-developed method of implementing a strategic plan. To Shell Oman Marketing Company, the system guarantees its staff to work effectively in harmonization with its strategic vision of responsibly driving growth and operations. Shell Oman has applied the PMS capability to incorporate high-performance tools and methods and thus measures and increases employee performance in various business activities. That goal alignment is one of the major aspects of the PMS at Shell Oman. Subordinate and managerial personnel sync their goals and objectives to support main organizational strategic directions and goals, including improvements in operational effectiveness, growth in non-fuel retail, and advancing Oman's Vision 2040. For example, while the company is covering more Shell Select shops and creating such novelties as the Shell GO + application, the PMS guarantees that each separate KPI can directly contribute to these objectives. The alignment helps everybody know what is required of him or her to achieve the mission of the company and helps create ownership. Another important element of Shell Oman's PMS is the constant qualitative performance assessment. Managers give periodic feedback to the employees to ensure that their actions are consistent with changing organizational goals, for instance, the reduction of emissions to zero and the adoption of renewable energy sources (Lin & Zhang, 2020). Data transferred from performance management tools in real-time makes it possible for Shell Oman to align employee objectives more effectively as the priorities change making the firm competitive in the volatile market. For example, as the company develops digitally focused value propositions such as 'Go Green' cholesterol; and invoicing system; the approach demands that employees be trained on how to go about this new change. Shell Oman Performance Management System involves the use of metrics to give employees credible and accurate appraisals of their worth to the organization. These assessments are applied also to define the most effective employees, appreciate their efforts, and offer corresponding incentives considering the amount of contribution to the company's success. At the same time, the strengths and development needs are managed through training and development initiatives. In addition to the trends analysis, Shell Oman uses historical performance data and analysis for choosing specific solutions to improve the workforce's productivity and involvement (Moon & Williams, 2021).

Review a range of different sources of management information

Management Information from Internal Sources

Internal sources of management information, as the name implies, are obtained from within the organization, and they are relevant when monitoring organizational performance. For Shell Oman, these include:

1. Financial Records: Statements for profits and losses, balance sheets, as well as cash flow statements make up necessary figures to measure solvency. These records allow Shell Oman to determine its return for investments made, evaluate new initiatives such as the extension of the network of EV charging stations, and identify cost-effectiveness.
2. Operational Data: Information on the operation of the business on a daily basis; supply chain choreography; state of company fleet; and retail occurrence present efficiency insights. For instance, Shell Oman analyses stock fluctuations or service station operating performance or the usage of the Shell GO+ app to discover trends.
3. Human Resources Information: Human capital data, such as absence figures, training histories, and successes and failures, are used in refining the workforce plan. For instance, Shell Oman applies the information to design programs that would improve the staff competence in the growing fields of, for instance, renewable power and customer satisfaction (Niven, 2020).
4. Customer Interaction Data: Unique data includes customers' feedback, purchasing records, and a database from their loyalty programs where essential data about consumers can be obtained. Shell's Shell Select shops and electronic channels collect useful information to customize products and improve customers' experience.

External Sources of Management Information

External information differs from internal data in that information from the outside helps to understand the context of the business environment. Shell Oman uses these sources to stay informed about market trends, competitor activities, and regulatory requirements:

1. Market Research: Market research and position analysis based on surveys on consumer preferences, industry analysis, and competitor analysis inform strategies. For example, Shell Oman uses market research data in the identification of strategies to increase the provision of low-carbon fuel products, as well as improve non-drive retail services.
2. Government Publications: This research identifies regulations, fiscal measures, and energy transition strategies including Oman's Vision 2040 as key macro environments influencing Shell Oman's strategic planning. It is seen these guidelines help the company to remain compliant with the national standards as well as foster sustainable growth.
3. Industry Reports: Best practice research data from trade publications, energy industry reviews, and financial statistics give the guidelines for performance. These reports aid Shell Oman in its competition analysis and in discovering areas where it can change to build its competency.
4. Partnership Data: Responses from such engagements provide key information about the reliability of the supply chain and, the performance of the vendor, suppliers, and the market. For example, information from suppliers enables Shell Oman to guarantee constant supplies of fuel and appropriate storage (Porter & Kramer, 2019).
5. Technological Trends: The adaptation to energy market changes in Shell Oman is strongly influenced by advances in energy technology and digitalization. It enables the company to stay abreast of developments in hydrogen energy and EV charging facilities necessary to underpin a cleaner energy future.

Management Information In Terms of Business Planning

Business intelligence has thus become a fundamental component of most contemporary business plans and architectures as organizations seek to extract valuable information from data to support decision-making and drive optimal business performance. For organizations like Shell Oman Marketing Company, it is a tool that enhances all-around organizational effectiveness and all its processes which keeps it relevant in competitive markets.

Types of Data Analytics

1. Descriptive Analytics: Another method is to use historical data – to train decision-making based on patterns and results analysis of previous time periods. For example, Shell Oman has employed descriptive analytics for analysing the sales records of Shell Select shops to conclude the extent of the impact of a marketing campaign.
2. Diagnostic Analytics: More specifically, while most business intelligence tools describe trends and outcomes, diagnostic analytics finds out why these issues exist. Shell Oman utilizes this to assess underperformance in specific retail outlets or irregularity in fuel consumption, which in turn justifies management action.
3. Predictive Analytics: This employs the use of statistical models and machine learning to predict future market trends. Shell Oman also uses one approach in the prediction of consumer demands in low-carbon goods and services such as EV charging services.
4. Prescriptive Analytics: While prescriptive analytics offers a data-driven solution, it uses prediction and optimization to provide a recommendation. For instance, Shell Oman prescribes models to control inventory costs in the service stations due to customer requirements (Turner & Lee, 2023).

Applications in Business

1. Customer Insights and Personalization: Data analytics can help companies comprehend and meet customer needs, and wants. Based on the transactional and loyalty program generated from the Shell GO+ app called Shell Oman, the company gets promotions and product recommendations for better customer satisfaction and loyalty.
2. Operational Efficiency: The amount of supply chain information can show bottlenecks and enhance activity efficiency. One of the major reasons for using analytics in Shell Oman is the efficiency of the fuel distribution network so that timely delivery of fuel is initiated while at the same time keeping the operational costs to the minimum.
3. Marketing Optimization: Such data enable analysis of the campaign effectiveness and further improvement of the existing promotion methods. Shell Oman pays attention to online traffic to increase the effectiveness of the publicity of the fuels and other products.
4. Sustainability Goals: Some examples include the use of data analytics in monitoring and controlling environmental costs. It also practices energy consumption audits and follows net-zero emission goals where Shell Oman employs the analytics to determine their carbon footprints (Turner & Lee, 2023).

Benefits of Data Analytics

Data analytics in business processes contribute to the accomplishment of enhanced decision-making, higher levels of efficiency, and satisfaction of customers. In the case of Shell Oman, it helps to respond to market trends, foster innovation in energy solutions, and align our company strategies with the national goals in the field of sustainability. Therefore, it is now obvious that data analytics is an essential resource in today's organizations and ensures efficient organization and competitiveness. Through analytics, a complex problem such as Shell Oman can enable them to justify the existence of implementing an analytics strategy and thus can add value to its stakeholders.

Conclusion

In conclusion, Shell Oman Marketing Company SAOG faces both internal and external challenges that affect its performance, including rising operational costs, fluctuating margins, and market volatility. The implementation of Management for Strategic Performance through tools such as Balanced Scorecards, benchmarking, variance analysis, and critical success factor evaluation enables the company to align its operations with strategic objectives. Additionally, leveraging management accounting information and data analytics ensures informed decision-making, operational efficiency, and progress toward sustainability goals.

References

• Anderson, K. & Johnson, P. (2021). Strategic Performance Management Systems: A Balanced Approach. New York: Routledge.
• Brown, M., Jones, R. & Smith, T. (2020). "The role of quality management information in enhancing strategic performance," Journal of Business Strategy, 41(3), pp. 23-35.
• Carter, R. & Easton, L. (2019). Supply Chain Management in Complex Business Structures. London: Palgrave Macmillan.
• Chen, W. & Lee, J. (2023). "Activity-based management in the era of digital transformation," Management Accounting Quarterly, 24(1), pp. 45-60.
• Davis, R. & Clark, H. (2020). "Integrating performance measures in strategic alliances," Strategic Management Journal, 41(2), pp. 89-102.
• Fitzgerald, L. & Moon, P. (2022). Rethinking Performance Measurement for Modern Businesses. 2nd ed. Oxford: Oxford University Press.
• Kaplan, R. S. & Norton, D. P. (2019). "Balancing strategy and operations with the Balanced Scorecard," Harvard Business Review, 97(5), pp. 68-75.
• Kumar, P. & Singh, M. (2023). "The impact of value-based management on shareholder wealth," Journal of Corporate Finance, 79(4), pp. 112-126.
• Langfield-Smith, K. & Thorne, H. (2022). Activity-Based Costing and Management: Modern Applications. Sydney: McGraw Hill Education.
• Lin, X. & Zhang, Y. (2020). "Assessing corporate failure using Z-scores in the post-pandemic era," Journal of Financial Analysis, 49(6), pp. 320-338.
• Moon, J. & Williams, T. (2021). "Performance pyramids and strategic alignment in multinational corporations," International Business Review, 30(5), pp. 105-120.
• Niven, P. R. (2020). Balanced Scorecard Evolution: A Dynamic Approach to Strategy Execution. Hoboken, NJ: Wiley.
• Porter, M. E. & Kramer, M. R. (2019). "Creating shared value through strategic partnerships," California Management Review, 61(3), pp. 12-27.
• Turner, J. & Lee, A. (2023). "The role of quality in modern performance management systems," Journal of Operational Research, 74(2), pp. 120-134.
• Zhang, L. & Wu, J. (2024). "Using Argenti's framework to prevent organizational decline," Journal of Business Research, 92(1), pp. 78-89.