Design On NOCF-oriented Performance Management System About H Corp.

Now the competitions among corporations are more and more fierce. It is a quitechallenge, which many managers engaging in managing have to face, that how to buildsome mechanism to ensure their enterprises could obtain competitive advantages, bycultivating innovation ability in management field. Apparently, performancemanagement, to some degree, satisfies these needs. In fact, performance managementnot only provides theories and techniques of performance appraisal, but also helpsenterprises march inside-and-outside resources, improve performance and form longcompetitive power.In the opinion of this thesis there is a profit-oriented performance system in the HCorp., which its characteristic is that pays high attention to profit, scale and output, andwhich its disadvantages include lacking of systematicness, short-time-oriented and theunreasonable method of goal-setting. So H Corp. increases its sales as well as inventoryand account receivable accumulate quickly, and then working capital gradually reduce,which compel H Corp. to loan in order to maintain operating.For improving above conditions the thesis introduces the thought and frameworkof net-operation-cash-flow(NOCF)-oriented performance management system, on thebasis of the theories of performance management, Enterprise’s Life Cycle, BalancedScorecard(BSC), and Enterprise’s Value, and using the methods of financial engineering,regression analysis, empirical research, contrastive analysis, etc. About how to set goalsthe thesis verifies that the relationship between NOCF and sales might be non-linear byreal operation data of H Corp., furthermore finding the method of estimating reasonablythe goal of NOCF: value retrodict. By drawing strategic map the thesis redesigns andrebuilds NOCF-oriented performance management system. Fianally the thesis pointsout that inventory, account receivable and budgetary control are three key links in thethis new performance system.The thesis thinks that H Corp. may improve its business performance in the help ofthe tools of performance management, by changing profit-oriented system toNOCF-oriented, and get out of ‘profit trap’.H Corp. is one of state-owned industrial enterprises in China. In my opinion, itwould contribute to promoting H Corp. itself, as well as being of benefit to other state-owned enterprises, that diagnoses and re-designs the performance managementsystem of H Corp.Of course the NOCF-orieted performance system has its limitations. For instance,it measures performance according to financial result, and ignores innovation in thefield of business pattern. It is a long-term and arduous task to research enterprise’sperformance system both in theory and in practice.