In the last blog, we began discussing about performance. We continue the decision in today's blog too - we here attempt to have a better understanding of one of the approached that could be taken to define and measure performance.
An organization could be looked at as an association of productive assets who voluntarily come together to create something of economic advantage. The owners of these productive assets would only be willing to make their resource available if they steadily see that total income (adjusted for risk - a rate of return higher than the bank could be thought of the minimum risk one could take) that is larger than the reasonable alternative one could have.
This gives us one base to define performance - The comparative value an organization is willing to create using its productive assets with the value that owners of these assets expect to obtain. If this value is larger than the value that the owner of the asset expects, he would be willing to make available these assets to the particular organization; else he would be dissatisfied and look at alternatives where the use of these assets would obtain its full value.
We would get this clearer with a hypothetical example we would give in the next blog.
Read in Kannada:
An organization could be looked at as an association of productive assets who voluntarily come together to create something of economic advantage. The owners of these productive assets would only be willing to make their resource available if they steadily see that total income (adjusted for risk - a rate of return higher than the bank could be thought of the minimum risk one could take) that is larger than the reasonable alternative one could have.
This gives us one base to define performance - The comparative value an organization is willing to create using its productive assets with the value that owners of these assets expect to obtain. If this value is larger than the value that the owner of the asset expects, he would be willing to make available these assets to the particular organization; else he would be dissatisfied and look at alternatives where the use of these assets would obtain its full value.
We would get this clearer with a hypothetical example we would give in the next blog.
Read in Kannada:
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