Business Planning Iyad Attari 2009


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Planning is the first function of any successful management.
It is the tool that all other managerial functions depends on.

It is a continuous process that aims to specify the goals, objectives, strategies, mission, and vision of any organization.
Depending on the type of objectives and time frame .

planning is divided into three main types; strategic, tactical, and operational.

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Business Planning Iyad Attari 2009

  1. 1. Business planning<br />Iyad S. Attari<br />2009<br />
  2. 2. Introduction<br />Planning is the first function of any successful management.<br />It is the tool that all other managerial functions depends on.<br />It is a continuous process that aims to specify the goals, objectives, strategies, mission, and vision of any organization.<br />
  3. 3. Introduction<br />Depending on the type of objectives and time frame .<br />planning is divided into three main types; strategic, tactical, and operational.<br />
  4. 4. Planning Concept and Principles <br />
  5. 5. Planning Principles <br />Good planning requires a methodical process that clearly defines the steps that lead to optimal solutions.<br />
  6. 6. Planning Principles <br />This process should reflect the following principles:<br />Comprehensive : all significant options and impacts are considered. <br />Efficient : the process should not waste time or money.<br />Inclusive : people affected by the plan have opportunities to be involved.<br />
  7. 7. Planning Principles <br />Informative : results are understood by stakeholders (people affected by a decision).<br />Integrated : individual, short-term decisions should support strategic, long-term goals. <br />Logical : each step leads to the next.<br />Transparent : everybody involved understands how the process operates.<br />
  8. 8. Planning Principles <br />A principle of good planning is that individual, short-term decisions should support strategic, long-term goals.<br />This requires comprehensive evaluation and negotiation to help people accept solutions that may seem difficult and costly in the short-term.<br />
  9. 9. Planning Principles <br />Good planning is understanding, comprehensive and strategic.<br />A planning process should not be limited to the first solution planned or the concerns of people who attend meetings.<br />
  10. 10. ExamplePlanning Principles<br />
  11. 11. Merchants might complain of insufficient customer parking near their stores<br />This problem can be defined in various ways:<br /><ul><li>Not enough parking supply.
  12. 12. Too many vehicles.
  13. 13. Inefficient management of available spaces.</li></ul>Each implying different solutions<br />
  14. 14. Here are questions to ask to help understand this problem:<br /><ul><li>How much parking exists, including spaces currently unavailable to customers?
  15. 15. Who currently uses the most convenient spaces?
  16. 16. Who encounters this problem, when and where?
  17. 17. How is parking currently managed (including regulations and prices)?</li></li></ul><li><ul><li>What is the cost of increasing parking supply?
  18. 18. What management strategies could help address this problem?
  19. 19. Who bears the costs and benefits from potential solutions?
  20. 20. How well do various solutions integrate with strategic planning objectives?</li></li></ul><li>Planning Concepts<br />A planning framework defines the basic planning process structure.<br />This typically includes the following components:<br />
  21. 21. Planning Concepts<br />A planning framework defines the basic planning process structure.<br />This typically includes the following components:<br />
  22. 22. Planning Concepts<br /><ul><li>Principles : A basic rule or concept used for decision-making.
  23. 23. Vision : A general description of the desired result of the planning process.
  24. 24. Problem : An undesirable condition to be mitigated (solved, reduced or compensated). </li></li></ul><li>Planning Concepts<br /><ul><li>Goals : A general desirable condition to be achieved.
  25. 25. Objectives : Specific ways to achieve goals.
  26. 26. Scope : The range (area, people, time, activities, etc.) to be included in a process.
  27. 27. Options : Possible solutions to a problem or ways to achieve an objective.</li></li></ul><li>Planning Concepts<br /><ul><li>Policies : A general course of action.
  28. 28. Plans : A scheme or set of actions. This may be a strategic (general and broad) or an action (specific and narrow) plan.
  29. 29. Programs : A specific set of objectives, responsibilities and tasks within an organization.
  30. 30. Tasks or Actions : A specific thing to be accomplished.</li></li></ul><li>Planning Concepts<br /><ul><li>Targets : Something specific to be achieved.
  31. 31. Performance indicators – Practical ways to measure progress toward objectives. </li></li></ul><li>Planning Concepts<br />Evaluation refers to the process of determining the impacts of an object, activity, policy or program, and its ultimate value.<br />
  32. 32. Types of Planning <br />
  33. 33. Types of Planning <br />Three types:<br />Strategic Planning<br />Tactical Planning<br />Operational Planning<br />
  34. 34. Types of Planning <br />Strategic Planning:<br /><ul><li>The art & science of formulating, developing, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives.
  35. 35. Is a course of action to achieve long-range goals.
  36. 36. Reflect the company’s direction and its purpose as stated in its mission statement.</li></li></ul><li>Types of Planning <br />Tactical Planning:<br /><ul><li>The tactical plan express how the strategic plan will be executed.
  37. 37. Course of actions to achieve short-term goals, generally within a year or less.
  38. 38. Tactical plans represent the short-term efforts to achieve the strategic, longer-term goals.
  39. 39. They are concerned with what the units under top management must do, how they must do it and who has the responsibility.</li></li></ul><li>Types of Planning <br />Operational Planning :<br /><ul><li>IS a description of how the work will be done, the flow of work from input to end results, including the machines which will be used.</li></li></ul><li>Types of Planning <br />Generally :<br /><ul><li>Strategic Planning is known as long term planning.
  40. 40. Operational planning is short term planning.
  41. 41. Tactic planning relates to in between both the above.</li></li></ul><li>Strategic Planning<br />
  42. 42. Environmental Analysis<br />(S.W.O.T.)<br />Tactical Plans<br />Operational plans, budgets<br />Master Strategies<br />Vision, mission, strategies,goals, objectives<br />Monitor Performance<br />Implementation<br />Adjust<br />
  43. 43. The art & science of formulating, developing, implementing and evaluating<br />cross-functional decisions that enable an organization to achieve its objectives<br />A complete look at how to position the organization for the future <br />29<br />Strategic Planning<br />
  44. 44. Matrixorganisation<br />CEO<br />Technical<br />Sales<br />INS<br />Eclm<br />HDS<br />SIF<br />PMC<br />OPD<br />Sub<br />NW<br />Core<br />Q.A.<br />Fin.<br />H.R.<br />MKT<br />Support<br />ICT<br />R&D<br />
  45. 45. Fundamental decision making/problem solving model<br /><ul><li>Defines where the organization is now, where it wants to be, and how it will get there
  46. 46. Gathers internal and external information.
  47. 47. Develops alternative strategies
  48. 48. Selects appropriate strategies
  49. 49. Implements a plan
  50. 50. Evaluates and revises the plan as needed</li></ul>31<br />Strategic Planning Process<br />
  51. 51. Strategic Planning ProcessPhase 1: Strategy Formulation<br />Vision<br />Guiding image of <br />the organizations <br />desired future<br />Strategy Formulation<br /><ul><li>Develop vision & </li></ul>mission statements<br /><ul><li>Define organizational </li></ul>values<br />Values<br /><ul><li> Describe what is </li></ul>important<br /><ul><li> Dictate employee </li></ul>behavior<br />Mission<br /><ul><li>Who the company is?
  52. 52. What the company do?
  53. 53. Who the company’s </li></ul>customers are?<br />32<br />
  54. 54. Vision, Mission, Objectives, and Goals<br />Vision<br /><ul><li> Defines the desired or intended future state of an organization or enterprise in terms of its fundamental objective and/or strategic direction.
  55. 55. Vision is a long term view.</li></ul>33<br />
  56. 56. Vision, Mission, Objectives, and Goals<br />Mission<br /><ul><li> Defines the fundamental purpose of an organization or an enterprise.
  57. 57. Describing why it exists and what it does to achieve its Vision
  58. 58. A corporate Mission can last for many years, or for the life of the organization.</li></ul>34<br />
  59. 59. Vision, Mission, Objectives, and Goals<br />Goals<br /><ul><li> are general guidelines that explain what you want to achieve in your company.
  60. 60. They are usually long-term and represent global visions.
  61. 61. such as “protect public health and safety.”</li></ul>35<br />
  62. 62. Vision, Mission, Objectives, and Goals<br />Objectives<br /><ul><li>define strategies or implementation steps to attain the identified goals.
  63. 63. Unlike goals, objectives are specific, measurable, and have a defined completion date.
  64. 64. They are more specific and outline the “who, what, when, where, and how” of reaching the goals.</li></ul>36<br />
  65. 65. Example<br />NatHealth<br />Vision, Mission, & Values <br />
  66. 66. الرؤيا<br />التوسع وتحقيق الإعتراف الإقليمي والعالمي كمزود رئيسي لخدمات التأمين الصحي ولإدارة المطالبات الإلكترونية، وذلك بإستخدام تقنية البطاقة الذكية<br />
  67. 67. الرسالة<br />تقديم خدمة متميزة للزبائن من شركات التأمين ، الصناديق ذاتية التأمين والمؤسسات الحكومية بهدف حماية الموجودات ومساعدتهم على توسعة مجالات عملهم وتحقيق تكاليف متدنية للمطالبات ، مع ضمان رفع مستويات الخدمة الطبية للمستخدم النهائي حسب السياسات التعاقدية المتفق عليها<br />
  68. 68. قيم نات هيلث<br />النزاهة والإستقامة<br />الإلتزام والمصداقية<br />الإفصاح والشفافية<br />الدقة والإنضباط<br />المحافظة على الممتلكات<br />عدم تضارب المصالح<br />اللطف والكياسة<br />التعامل بمهنية ومسؤولية مع الجميع<br />10- النظافة والترتيب والمحافظة على البيئة الصحية<br />حماية الملكية الفكرية وأسرار المؤسسة (نـاتهيلـث )<br />
  69. 69. Strategic Planning ProcessPhase 2: Strategy Development<br />Strategy Development<br />Internal Strengths<br /><ul><li>Conduct a SWOT analysis</li></ul> including environmental <br /> scan<br /><ul><li>Establish long-term </li></ul>objectives (3-5 Ys)<br /><ul><li>Identify strategies:</li></ul> - corporate<br /> - unit & <br /> - functional <br />S<br />OT<br />W<br />External<br />Threats<br />External <br />Opportunities<br />Internal Weaknesses<br />41<br />
  70. 70. Placeholder for your own sub headline<br />Strengths<br />Weaknesses<br />Internal analysis<br />External analysis <br />SWOT<br />Threats<br />Opportunities<br />!<br />SWOT Analysis<br />
  71. 71. Placeholder for your own sub headline<br />S T R E N G T H S<br />W E A K N E S S E S <br /><ul><li>What do you do particularly well?
  72. 72. What do you do that is unique in the “marketplace?”
  73. 73. What do your customers/ clients/ patrons ask for you to do over and over again?
  74. 74. What do you have the right tools/ resources to accomplish?
  75. 75. What do you not feel as comfortable doing?
  76. 76. What needed resources, staff, or skills do you lack?
  77. 77. Are there new situations coming down the road that you can take advantage of (new programs being offered, new faculty joining the department, new tools available to you)?
  78. 78. Are there gaps in the “market” that you can fill?
  79. 79. Are there partnerships that might be fruitful?
  80. 80. Who is your competition and what do they offer that you can’t do as well or at all?
  81. 81. Are there “environmental” changes or situations that could cause problems for you and your programs?
  82. 82. What other roadblocks are being thrown in your path?</li></ul>O P P O R T U N I T I E S<br />T H R E A T S<br />SWOT Analysis<br />
  83. 83. 44<br />Strategic Planning ProcessPhase 3: Strategy Implementation<br />Strategy Implementation<br /><ul><li>Establish short-term </li></ul> objectives (6 Ms-1 Y)<br /><ul><li>Develop action plans
  84. 84. Allocate resources
  85. 85. Motivate employees</li></li></ul><li>Strategic Planning ProcessPhase 4: Strategy Evaluation<br />Activity one:<br />Review strategies<br />Strategy Evaluation<br />Activity <br />three:<br />Take <br />corrective <br />action<br /><ul><li>Review strategies
  86. 86. Measure performance
  87. 87. Take corrective action</li></ul>Have significant differences occurred?<br />Yes<br />No<br />Activity two:<br />Measure performance<br />Have significant differences occurred?<br />Yes<br />No<br />Continue present course<br />Framework to Evaluate Strategies<br />February 6, 2010<br />45<br />
  88. 88. Assessing the Internal Environment<br /><ul><li>Describe the role of each</li></ul> function in the organization.<br /><ul><li> Understand the organization structure & </li></ul>its effect of the implementation of strategic<br /> planning<br />must be able to <br /><ul><li>Understand the perspective of your business partners.
  89. 89. Create communication & collaboration.
  90. 90. Identify internal needs & emerging issues.</li></ul>46<br />
  91. 91. Finance:<br /> Assists other business units in the financial aspects of their business.<br /><ul><li>Pricing products
  92. 92. Creating financial models</li></ul>Accounting:<br /> Balances the checkbook of the company.<br /><ul><li>Accounts receivable
  93. 93. Accounts payable</li></ul>47<br />Finance and Accounting<br />
  94. 94. 48<br />Assets, Liabilities & Equity<br />
  95. 95. Accounts Payable & Accounts Receivable<br />Accounts Payable<br />Accounts Receivable<br />The money <br />a company owes to<br /> its vender & suppliers <br />(liability accounts)<br />The money <br />a company’s customers <br />Owe the company <br />(assets accounts)<br />49<br />
  96. 96. 50<br />Balance Sheet<br /><ul><li>Summarizes the firm’s financial position</li></ul> Assets = Liabilities + Equity<br /><ul><li>Every financial transaction is an exchange, and both sides are recorded.
  97. 97. Only records transactions measured in money.
  98. 98. Profit increase equity
  99. 99. Cash withdrawal decrease equity </li></li></ul><li>51<br />Income Statement<br />A statement explaining<br /> revenues, expenses, and profits over a specific period of time<br />(one year or a quarter) <br />Gross sales $360,000<br />Less cost of goods sold $240,000<br />Gross profit $120,000<br />Less expenses: $50,000<br />Salaries $20,000<br />Rent $18,000<br />Utilities $7,200<br />Depreciation $1,800<br />Interest $3,000<br />Income less expenses $70,000<br />Income tax expense $28,000<br />Net income $42,000<br />
  100. 100. 52<br />Gross Profit Margin <br />Measures the difference between<br />what its costs <br />to produce a product<br />selling price <br />
  101. 101. Product<br />Promotion<br />Place<br />Key<br />Elements<br />4 Ps<br />Price<br />Marketing and Sales<br />Sales:<br />Sell the organization&apos;s <br />product <br />to the marketplace<br />Marketing<br />The process of planning, pricing, promoting & distributing goods/services<br />to satisfy organizational objectives <br />What the organization sells to make profit <br />Who the product/service <br />will be made available <br />for purchase by customers <br /> Techniques for communicating information about product/service to customers <br />A key decision in marketing plan. <br />(large share of the market/ lowest price) <br />53<br />
  102. 102. Capacity<br />Standards<br />Control<br />Key<br />concepts<br />Scheduling<br />Inventory<br />Operations<br />The Central Focus<br /> To provide goods and services to customers<br />Primary responsibility Productivity, quality, cost, delivery & performance<br />Affected by supply chain management<br />54<br />
  103. 103. Information Technology<br />Enables an organization to use information to support its strategic objectives.<br /><ul><li>Strategic information systems are designed to achieve competitive advantages.
  104. 104. Airline reservation systems
  105. 105. Operational systems focus on reducing costs or improving productivity.
  106. 106. Remote access systems that allow telecommuting</li></ul>55<br />
  107. 107. 56<br />Employees<br />
  108. 108. 57<br />Increasing Employee Engagement<br />Employees willingness to “go the extra mile”<br />Measuring employee engagement<br /><ul><li> How employee describes the organization
  109. 109. Whether they choose to remain
  110. 110. How they work</li></li></ul><li>58<br />Investing in Human Capital<br />Human capital consists of <br />combined knowledge, skills and experience of company’s employees <br /><ul><li>Create an organizational culture that develop creative, loyal and empowered employees
  111. 111. HR to play a role in confirming the organization’s return on investment (ROI) in its human capital</li></li></ul><li>Organizational Design <br />Introduction<br />Growth<br />Maturity <br />Decline<br /><ul><li>High energy/creativity
  112. 112. Develop products/</li></ul>Services & markets<br /><ul><li>Experienced staff
  113. 113. Meet or exceed the </li></ul> pay range<br /><ul><li>No training
  114. 114. Basic employee policy
  115. 115. Change & expansion
  116. 116. Backlogs & scheduling</li></ul> problem<br /><ul><li> Polices, procedures &</li></ul> rules in place<br /><ul><li> Recruitment & </li></ul> selection increased<br /><ul><li> Leadership sustains </li></ul> moral/ motivation <br /> while building teams <br /><ul><li>Problem resolved
  117. 117. Staffing & organizational </li></ul> culture stabilized<br /><ul><li> Additional product & </li></ul> services <br /><ul><li> Training
  118. 118. Labour cost becomes</li></ul> a factor<br /><ul><li> No change
  119. 119. Fixed rules & </li></ul> regulations<br /><ul><li> Leadership resist </li></ul> change<br /><ul><li> Enhanced product/cost</li></ul> reduction programs <br /> (early retirement- <br /> closing major facilities- <br /> outsourcing- <br /> third party contracts- <br /> retaining key staff) <br />59<br />
  120. 120. 60<br />Patterns of Organizations Change<br />
  121. 121. Scanning The External Environment <br />
  122. 122. Environmental Scanning<br />Is a process that systematically surveys & interprets relevant data <br />to identify external opportunities and threats <br />Now<br />In the <br />future<br />
  123. 123. External EnvironmentFactors <br />
  124. 124. Demographic Factors<br />
  125. 125. Demographic Factors<br />Age<br />Nontraditional labor force<br />Gender<br />Unskilled labor<br />Generational differences <br />Ethnicity <br />Geographic shifts in populations<br />
  126. 126. Demographic Factors (cont.)Age<br />
  127. 127. Demographic Factors (cont.)Age<br />Baby boomers <br />2004<br />78 million baby boomers <br />Educated<br />Trained<br />Loyal<br />Dependable<br />Start to be 60 in 2006<br />Born between <br />1946 and 1964<br />44% <br />
  128. 128. Demographic Factors (cont.)Gender <br />47% of 2004 workforce<br />56% of student in college campuses<br />Family constrain <br />Inflexible working <br />conditions <br />Occupational <br />barriers <br />Gender <br />stereotyping <br />
  129. 129. Demographic Factors (cont.)Generational differences<br />Millennium<br />Born between <br />1965 and 1980<br />Born after 1980<br />
  130. 130. Demographic Factors (cont.)Geographic shifts in populations<br />Urban centers<br />The suburbs<br />
  131. 131. Demographic Factors (cont.)Ethnicity<br />Avoid <br />discrimination &<br />harassment<br />Increase inclusion<br />& engagement<br />Hispanic<br />The largest minority group <br />in US<br />Hawaii<br />Minorities made up the majority of the population<br />
  132. 132. Demographic Factors (cont.)Unskilled labor<br />Skilled workers<br />Higher education<br />Training<br />Off shoring<br />
  133. 133. Demographic Factors (cont.)Nontraditional labor force<br />Find enabling technology <br />Create enabling environment<br />
  134. 134. Economic Factors<br />GDP<br />CPI<br />Interest<br />rates<br />Economic<br />Factors<br />Disposable<br />income<br />Inflation<br />Total value of goods and services produced in a country in a given year<br />Gross Domestic Product<br />Good economy<br />Wage increases <br />No wage increases <br />Downsizing<br />Measure the average change over time in the prices paid by the consumer for goods & services <br />Unemployment<br />Less investment <br />Employment<br />Investment<br />Consumer Price Index<br />The amount of money the consumer have to spend after taxes paid <br />When supply of money is in excess of the amount of goods and services <br />Salary compression <br />Increase in starting salary<br />
  135. 135. Other Factors <br />
  136. 136. Risk Management <br />Prepared by Iyad Al-Attari<br />2007<br />
  137. 137. First: Introduction to Risk :<br />
  138. 138. What is Risk ?<br />A - Any obstacles to reach the Goal .<br /> B - Any obstacle to reach profit for the business. <br /> C - Risk is connected with bad results in the future.<br />
  139. 139. So Risk aspects * Bad results occurrence. <br /> * Future Events.<br /> * Probabilities.<br />We Describe Risk : The Uncertainty of the future ,as the probability of bad result of any future events.<br />
  140. 140. Example :<br />
  141. 141. Type Of Risks<br />what is the obstacles not only effect the business negatively (income) but also to Maximize income .<br /> Inflation Risk :<br /><ul><li>Inflation has an advantage for producers but disadvantages for consumer.
  142. 142. To measure the inflation= The Average of all goods and services. ( The important prices and non important prices taking together .
  143. 143. So the simple average not considered to measure inflation and replaced by the Weighted Average .
  144. 144. Weighted Average (price level) = (p1 * w1) + (p2 * w2)+…………(pn * wn) = Points.
  145. 145. The relationship between inflation and unemployment . ( is negative , when the inflation increase the employers or producers use more employees to collect more revenues from the increase prices because it become worth it . ( Fillips theory ).</li></li></ul><li>Negative Relation<br />2<br />Increase<br />1<br />Decrease<br />
  146. 146. Political Risk :<br />
  147. 147. Political Risk :<br />The probability of loss from actions of governments.<br />Political system in the country .<br />Changes in public opinion ,government policy , tax laws, regulations on exportations, foreign influence, & War.<br />
  148. 148. Exchange Rate Risk :<br /><ul><li>Is the risk that a foreign currency transaction will be negatively exposed in exchange rates.
  149. 149. For example the Jordanian currency drop in year 1989 against the us dollar.
  150. 150. Foreign currency risk : Hard currencies ( US Dollar, Euro , Pound , Yen )
  151. 151. Other currencies called the Soft currencies.
  152. 152. What effect the currency price : a) GNP b) Inflation</li></ul> c) The increase in the interest rate on the currency effect to increase the demand on it .<br />
  153. 153. Interest Rate Risk :<br /><ul><li>Is the risk of fluctuations in the value of assets due to changes in interest rates.
  154. 154. Greater the longer the maturity of the asset.
  155. 155. The value of bonds decline when the interest rates increase .
  156. 156. If interest rate Decline lower return will be available for reinvestment of interest & principal payments received .</li></ul>Default risk:<br /><ul><li>Is the risk that the borrower will be unable to repay debt.
  157. 157. The higher the default risk the higher the rate of return required by the investor .</li></li></ul><li>Credit Risk :<br /><ul><li>Ex. When you can collect the loans after 3 years so the purchasing power will decrease.
  158. 158. Type of credit risk :( Default risk , interest rate changes ).
  159. 159. Credit Policy :</li></ul> Credit period. ( 2/10 , net 30 )<br /> Discounts given for early payments. ( 2/10 , net 30 )<br /> Credit Standards. ( financial strength can accept credit customers, but this cause bad debts).<br /> Collection Policy. ( speed up collections but it might also anger customers).<br />
  160. 160. Market Risk :<br /><ul><li>Changes in prices will result from changes that effect all firms.
  161. 161. The Competition is the risk but not the monopoly .
  162. 162. Prices correlated to some degree with broad swing in the economy caused by recession , inflation high interest rates ,etc.
  163. 163. Called unsystematic risk or no diversifiable risk.</li></ul> Business Risk :<br /><ul><li>Is the fluctuations in earnings before interest & tax ( Operating income) when the firm it used no debt.
  164. 164. Depends on factors such as:</li></ul> 1) Demand Variables.<br /> 2) Sales Price Variables.<br /> 3) Input Price Variables.<br /> 4) Amount Of Operating Leverage.<br />
  165. 165. Regulations Risk :<br /><ul><li>Such as the central bank regulation for the local banks to increase their capitals for a higher limits . The solution here is to increase the capital or merge with other banks . </li></ul>Finance Risk :<br /><ul><li>The possibility that an asset cannot be sold on short notice for its market value .
  166. 166. Which is the risk to the shareholders from the use of financial leverage.
  167. 167. Called the liquidity risk for the short term period but when it became a chronic or long term we call it Bankruptcy.
  168. 168. From business failure , stock market, interest rates, etc.</li></ul>Employee Risk :<br /><ul><li>Strikes.
  169. 169. Labor unions.
  170. 170. Unskilled labor.
  171. 171. Ethical risk . </li></li></ul><li>Management Risk :<br /><ul><li>Inefficient management.
  172. 172. mismanagement.
  173. 173. Ethical risks.</li></ul>Technological Risk :<br /><ul><li>Old machines or systems for production and services.
  174. 174. From advances in technology technical failure etc. </li></li></ul><li>Natural Risk :<br /><ul><li>Earth quick.
  175. 175. Volcano.
  176. 176. Flood.
  177. 177. Fires.
  178. 178. Accident
  179. 179. Disease.</li></li></ul><li>Environmental Risk :<br /><ul><li>Pollution.</li></ul>Natural of the Business Risk :<br /><ul><li>Place of the building, (position far from the harbor or airport ).
  180. 180. Operational ( to distribution to supplies & operations, loss of access to essential assets , failures in distribution). </li></li></ul><li>Portfolio Risk :<br /><ul><li>Is the risk remaining after allowing for risk reducing effects of combining securities into a portfolio .
  181. 181. Portfolio risk is attributable to the poor balance of risks within the portfolio.
  182. 182. There is a limitation for the no. of securities in the portfolio.</li></li></ul><li>According to the source of risks<br />A) National Risk : Inside the co.<br /><ul><li>Firm risk. ( any risk inside the firm).
  183. 183. Market risk. ( Competition from other co. from the same country ).
  184. 184. Inflation risk. ( and the local industry for the same industry ).</li></ul> B) International Risk : Outside the co.<br /><ul><li>Firm risk. ( in the international markets).
  185. 185. Market risk. ( Competition from other co. from the other country ).
  186. 186. Inflation risk. ( International relations between 2 co. such as Mercedes international effect Mercedes in Jordan strongly ).</li></ul>Economy<br />Market<br />firm<br />
  187. 187. According to the standard of controllability risk<br />A) Controllable Risk :<br /><ul><li>You can minimize it but can not delete it.
  188. 188. Called  Firm risk  Systematic risk  Avoidable risk. Diversifiable risk.</li></ul>B) uncontrollable Risk :<br /><ul><li>The risk that you can not minimize it .
  189. 189. Called  Market risk  Economy risk  Unsystematic risk Non-Diversifiable risk.</li></li></ul><li>Human being Behavior against Risk:<br />A- Risk lover B- Risk Avoider <br /> (Risk Gamblers). (Risk averter).<br />
  190. 190. Question: Do the risk avoider accept the same level of return as will as the risk lover ?<br />Answer :No , The higher the risk the higher the return.<br />Or higher return the higher the risk.<br />
  191. 191. <ul><li>What kind of relationship between return & risk.</li></ul>Positive relationship . <br />
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  224. 224. key performance indicator (KPI)<br />
  225. 225. key performance indicator (KPI)<br /><ul><li>Is a measure of performance
  226. 226. Commonly used to help an organization define and evaluate how successful it is.
  227. 227. Typically in terms of making progress towards its long-term organizational goals.
  228. 228. Measure activities such as the benefits of leadership development, engagement, service, and satisfaction.
  229. 229. KPIs are typically tied to an organization's strategy using concepts or techniques such as the Balanced Scorecard.</li></li></ul><li>key performance indicator (KPI)<br />The Balanced scorecard (BSC) <br /><ul><li>Is a strategic performance management tool.
  230. 230. Measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy.
  231. 231. By focusing not only on financial outcomes but also on the operational, marketing and developmental inputs to these. </li></li></ul><li>key performance indicator (KPI)<br />The Balanced scorecard (BSC) <br /><ul><li>helps provide a more comprehensive view of a business, which in turn helps organizations act in their best long-term interests.</li></li></ul><li>key performance indicator (KPI)<br />Implementing Balanced Scorecards typically includes four processes:<br />1- Translating the vision into operational goals; <br />2- Communicating the vision and link it to individual performance; <br />3- Business planning; index setting <br />4- Feedback and learning, and adjusting the strategy accordingly. <br />
  232. 232. key performance indicator (KPI)<br />Bsc Perspectives :<br /><ul><li>suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:
  233. 233. The Learning & Growth Perspective
  234. 234. The Business Process Perspective
  235. 235. The Customer Perspective
  236. 236. The Financial Perspective</li></li></ul><li>Balanced Scorecard Framework<br />Placeholder for your own sub headline<br />Financial<br />„To succeed financially, how should we appear to our shareholders?<br />Customer<br />Business Processes<br />BalancedScorecard<br />„To achieve our vision, how should we appear to our customers?“<br />„To satisfy our shareholders and customers, what business processes must we excel at?“<br />Learning & Growth<br />„To achieve our vision, how will we sustain our ability to change and improve?“<br />
  237. 237. key performance indicator (KPI)<br />
  238. 238. Thank You<br />Iyad Attari<br />