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MGT601 - SME Management - Lecture Handout 12

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SHORT AND MEDIUM TERM ISSUES FOR SME POLICY FORMULATION – II

This lecture is a continuation of the lectures No 9&10 and 11 dealing with the short term, medium term and long term issues. These issues are pre-requisites for forming a comprehensive SME policy.

Human Resource Development

One of the major challenges that SME have to face is the emergence of the knowledge-based economy. People must continue to innovate, change and upgrade. There is a need to nurture the entrepreneurial spirit and skill development for adopting innovative technologies. The low-literacy level of our population poses an immense challenge to our competitiveness. Yet, it is a fact of life, which we will not overcome, in the short run. It is therefore imperative that we seek intelligent short and medium-term solutions to bridge the literacy gap.

One aspect of the Government’s strategy is to strengthen non-formal skills and entrepreneurship development, to better prepare workers for employment and to improve population’s general capacity of self-employment. But are there other ways by which we can enhance the skills of our workforce in such a way that we need not despair when facing external competition?

The government has established a number of institutions that impart training and skill development. These institutions, Pakistan Institute of Management Science (PIMS), Provincial Vocational Training Councils Authority, Technical Training and Vocational Authority (TEVTA) Government Universities and various other support institutions have however remained rather passive regarding the shaping of human resource development for SME.

A frequent complaint is the mismatch of the output of our human resource development institutions with the demand of SME. There are also only limited options for the training of the middle management. Low skills of workforce, inadequate vocational training facilities yet remain out of the scope of the reforms agenda. Are there any mechanisms by which we may achieve effective consultation between supply and demand sides of our vocational training system so as to attain a maximum benefit for our economy?

Entrepreneurship does not breed in a vacuum. For a healthy, growing business environment, it is necessary to foster entrepreneurial culture in Pakistan, which goes beyond the inclination to trade in goods. Entrepreneurial skill development programs can boost this.

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MGT603 - Strategic Management - Lecture Handout 44

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MEASURING ORGANIZATIONAL PERFORMANCE

Learning Objectives

This topic concern with various is for measuring the performance of an organization.

Measuring organizational performance

To determine that which objectives are most important in the evaluation of strategies can be difficult. Strategy evaluation is based on both quantitative and qualitative criteria. Selecting the exact set of criteria for evaluating strategies depends on a particular organization's size, industry, strategies, and management philosophy. An organization pursuing a retrenchment strategy, for example, could have an entirely different set of evaluative criteria from an organization pursuing a market-development strategy. Quantitative criteria commonly used to evaluate strategies are financial ratios, which strategists use to make three critical comparisons: (1) comparing the firm's performance over different time periods, (2) comparing the firm's performance to competitors', and (3) comparing the firm's performance to industry averages. Some key financial ratios that are particularly useful as criteria for strategy evaluation are as follows:

  1. Return on investment
  2. Return on equity
  3. Profit margin
  4. Market share
  5. Debt to equity
  6. Earnings per share
  7. Sales growth
  8. Asset growth

  9. Read more: MGT603 - Strategic Management - Lecture Handout 44