Tuesday, 16 November 2010

Using system thinking to analyse performance appraisal of AngloPlatinum

Introduction
Systems thinking is the process of understanding how things influence one another within a whole.

Using Systems Thinking to enhance Strategy Maps
Systemic thinking can be applied to the strategic and functional level disciplines in an organisation. It enhances one's ability to aligning organisational intent with its behavioural performance, for purposes of increasing competitiveness.

Martin Kunc from the School of Business, University of Adolfo Ibanez, Santiago, Chile, proposes that systems thinking can be used to:
- Analyse the existing causal models between what is measured from a performance appraisal point of view and what the objectives of the organisation are;
- A model can be developed through which systems thinking can enhance the alignment between measurement and objective outcome, thus narrowing the gap between the organisational intent and its behaviour.


Applying Systems Thinking to Anglo Platinum
Purpose
Using the principles of Kunc an analysis was performed of the existing causal models between what is  measured from a performance appraisal point of view and the stated objectives of AngloPlatinum (“AngloPlat”), a mining company in the South African platinum industry. Based on this analysis a model was proposed through which systems thinking can enhance the alignment between measurement and objective outcome, thus narrowing the gap between the organisational intent and its behaviour.

The analysis was performed from the perspective of an investor and relies on publicly available information.

Findings
Befitting the stature of a listed entity a significant amount of information is available for the investor to analyse. Despite this, the following weaknesses were noted:
- No information is provided by management regarding performance in certain strategic areas;
- Certain key measures of success not identified;
- Conflicting measures of success are not clarified; and
- Timing differences in performance measures are not noted.

The full article can be found here.

Regards

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