The chairman of Adama Group, which is large and diversified, has expressed concern about the inadequacies of the present voluminous monthly reports submitted to the Board. He acknowledges that it compares budget and actual results for all operations, and that it contains extensive reporting of non-financial indicators such as customer satisfaction and factory performance towards Total Quality Management (TQM). However, he regards much of this as operational detail, and considers that the report should place more emphasis on strategic issues.
A strategy consultant is currently assisting the Group to implement a Balanced Score card to effectively monitor the performance of managers.
Required:
i) Explain THREE strategic issues that should engage the attention of the Board of Directors of Adama Group. (6 marks)
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The strategy elements can be analysed into three broad categories
- Strategic management-How the entity intends to generate and preserve Value in terms of the following : strategy and objectives; business model
- Business Environment-The internal and external environments in which the entity operates – i.e. Trends and factors; Principals risks and uncertainties; Environmental, employees, social, community and human right matters.
- Business performance and position-How the entity has developed and performed and its position at the year end – Analysis of performance and position; Key performance indicators (KPIs); Employee gender diversity