ORGANISATIONAL PERFORMANCE ASSESSMENTS

Organisational Performance Assessments

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Organisational Performance Assessments

Introduction

Organisational Performance Assessments (OPA) refers to an evaluation process of how organisation has performed against particular targets and goals. OPA emphasises on what organisation has achieved in accordance with its stated objectives and mission.

OPA looks at the key performance plans, priorities, goals and mandates, and evaluate the progress of industry or an organisation towards its accomplishment. These assessments are essential in order to constitute good performance. In the accounting and finance context, performance assessment of an organisation refers to the assessment of changes in net operating capital, ratio of diversification of funding sources and ratio of total assets to total liabilities.

In United Kingdom, private house building has the largest contribution in supplying house since 1960s, and dominant 90 percent market share since 1980s. Report of IMF provide strong evidence about the financial crises taken place in UK due to recession and resulted in poor performance of house building sector. The short term assets and liabilities are concerned with the working capital policy within the maturity period of one year. Regardless of the size of an organization, working capital management is significant for financial health of industry. For the survival and growth of companies efficient working capital is certainly a need because it demonstrates the sales, production and inventory level (Pierce & Sweeney, 2006: 19-39).

Financial managers are engaged in management of working capital than other financial activities. Moreover, financial distress directed the industry towards bankruptcy because of the poor short-term liability and assets management. In assessing a company performance, one of the important factors is the financial performance assessment.

One of the foremost companies in the UK house building industry of United Kingdom is Barratt Development Plc, to exemplify how they assess the company's performance to assess its financial wellness and how they assess financial performance indicators in order to manage organizational performance. This paper assesses organizational performance of Barrett Development Plc and discusses the influence of economic conditions and external market on shareholder value.

Discussion

In UK, many public and private sector firms are not executing these practices because of obsolete company structure and business processes. Consequently, there is a huge problem in UK house building sector. Companies related to this sector are one of the major contributors on the way to economy in terms of growth, employment generation, contribution to GDP and profitability.

The role and value of organisational performance assessments in the context of house building sector is essential in creating cash generation, wealth for business, and provide a sufficient return on investment considering the risks associated with business and in resource investment. There are three main elements that facilitate and help in assessing OPA which are financial planning, financial control and financial decision-making (ACCA, 2006: 2-10).

Management require ensuring that adequate financial support is accessible at the right time to fulfil the business needs. In the short run, funding possibly needed to invest in purchasing raw material, fund for credit purchase and pay ...