22421 Management Decisions: Heineken's Performance Analysis Report

This report provides an in-depth analysis of Heineken's organizational performance, focusing on financial, market, and shareholder perspectives. It examines Heineken's business objectives, strategies, and organizational structure, evaluating performance based on operational variables, market performance, customer satisfaction, product quality, and financial factors. The report compares Heineken's financial performance in 2017 with 2016, analyzing sales volume, revenue, operating profit, and net profit. It also considers non-financial aspects such as sustainability, employee satisfaction, brand reputation, and customer satisfaction, highlighting Heineken's commitment to sustainable development and stakeholder value. The analysis justifies Heineken's overall performance, emphasizing its focus on both financial and non-financial growth to achieve customer satisfaction and maintain brand reputation. Desklib offers a wide range of study resources, including past papers and solved assignments, to support students in their academic endeavors.

22421 Management Decisions and Control 2018 Autumn – Individual assignment
Individual Report
Define Performance
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22421 Management Decisions and Control 2018 Autumn – Individual assignment
Executive Summary
The main motive to prepare this report is to understand how organization defines their
organizational performance. The organizational performance can be categorized in three main
areas, the financial performance, market performance and shareholder’s performance. The report
aims to define what performance means to the organization. Heineken has been selected from the
list of companies provided. The report has succeeded in explaining the organizational
performance through providing critical overview of organizational analysis, comparing financial
performance in year 2017 with year 2016, evaluating non-financial matters and analysis of
shareholder’s wealth.
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22421 Management Decisions and Control 2018 Autumn – Individual assignment
Table of Contents
Introduction......................................................................................................................................4
Organizational Analysis...................................................................................................................4
Defining Performance......................................................................................................................4
Justification of Definition of Performance......................................................................................6
References List................................................................................................................................8
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22421 Management Decisions and Control 2018 Autumn – Individual assignment
Introduction
The present report is developed for providing an analysis of the performance of a selected
business organization. In this regard, the report focuses on carrying out an analysis of the
performance of a specific business unit or parent company. The report has provided an overview
regarding the business unit, objectives, strategy, structure and activities of the selected
organization. It has demonstrated the most critical aspects of performance of the selected
organization and a justification regarding the appropriateness of its performance assessed as per
the nature of selected organization or business unit.
Organizational Analysis
Heineken, a Dutch brewing company, involved in manufacturing of about 250
international, regional, local and specialty beers. The company has about 165 breweries
operating across 70 countries and has maintained a workforce diversity of 73,000 people. The
company carries out its operations through its parent group and several subsidiaries of Amstel
Brewery, Brasil Kirin, FEMSA and many others. It is a leading provider of brewing products
across the world through establishing its regional and local brands and global partnerships. The
business objective of the company is to strengthen its global position in the brewing industry
using sustainable business practices. It prioritizes on delivering value to its stakeholders through
achieving long-term sustainability. The company strategy is developed around its four business
priorities for action, that are, securing its winning position in the marketplace, focusing on
achieving long-term sustainability and continuing delivering of its growth and value creation for
shareholders (Annual Report, 2017). The company develops its strategy around these four
business priorities for achieving a competitive position within the marketplace and continuing
delivering value for the shareholders (Heineken: Company & Strategy, 2017). The four business
priorities of the company can be depicted as follows:
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22421 Management Decisions and Control 2018 Autumn – Individual assignment
(Source: http://www.theheinekencompany.com/about-us/company-strategy)
The company has established an effective ownership structure for ensuring its growth and
independent conduct of business activities. As per the ownership of different shareholders, the
company organizational structure is divided into four business units of Heineken Holding N.V,
Heineken N.V, Executive Board Heineken N.V and supervisory board of Heineken N.V. The
Heineken Holding N.V. supervises all the management related business activities and thus
occupies the role of business leader. Heineken N.V is the legal business unit of the parent
company and works as per its direction. Executive Board Heineken N.V ensures the effective
implementation of the business policies, financial tasks and marketing activities. At last, the
supervisory board of Heineken N.V helps the management in the decision-making process by
taking into consideration the advice of the stakeholders (Annual Report, 2017).
Defining Performance
The performance in context to organization is defined as the evaluation of the company’s
performance to its goals and objectives. The main three aspects that define the performance are
financial performance, market performance and shareholders’ value. The performance of the
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22421 Management Decisions and Control 2018 Autumn – Individual assignment
Heineken Holding N.V, the parent group of the global firm, can be assessedbased on operational
variables, market performance, customer satisfaction, product quality and financial factors
(Mehta, 2009). The operational variables that can assess the performance of the parent group of
Heinekens are sales and profitability. The analysis of the sales volume and profitability achieved
through the operational activities of the company in comparison to that determined provides an
assessment of the operational performance.
Every organization measures its business performance through comparing the current
year financial data with the past year financial data. There are various ways to measure the
business performance such as variance analysis, trend analysis, ratio analysis, and share
performance analysis (Schermerhor, 2006). Heineken believes that success of business totally
depends upon the customer satisfaction and sales performance of the company. It is certain that
shareholdersare interest in the financial performance of the business as more profits will provide
them more holding period return to the customer. So,to evaluate the performance, it is certain to
evaluate the financial strength of the company in present year and compare it with the past year
performance in order to determine position of the company (Barr, 2017).
The consolidated beer volume sale in year 2016 was 200.1 million hectoliters and it has
increased to 218.0 million hectoliters that clearly shown a very good increase of 9% in the
current year as compare to past year. This information shows that customers of the company
have increased by considerable amount that force to increase the sales volume to 218.00 million
hectoliters. It can be seen from below image taken from the annual report.
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22421 Management Decisions and Control 2018 Autumn – Individual assignment
Looking at the revenue of the company it can be said that there was hike of 5.3% in the
current year 2017 as compared to previous year 2016. There was major increase in the operating
profit due to higher revenue and cost efficiency measures implemented by the company in the
current year. The net profit has been increased by Euro 395 million to 1935 million Euros. It
means that current year profitability performance of the company was very strong as compared
to previous year performance (Annual Report, 2017).
The performance not only means financial performance asnon-financial performance also
been considered in measuring the performance of the company. The non-financial aspects that
define the performance are sustainability, employee’s satisfaction, brand reputation, and
customer satisfaction (Charles and Kumar, 2014).
Heineken takes sustainability as very important aspect for the organization development
and takes effective measures to promote sustainable development (Horváth and Pütter, 2017).
Following diagram clearly shows what sustainability means to the company.
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22421 Management Decisions and Control 2018 Autumn – Individual assignment
(Source: Heinkein Sustainability Review 2016)
The above diagram clearly indicates that Heineken make use of every important aspect of
sustainability to make sure that no harm is caused to people, planet and society (Jeurissen, 2007).
The main sustainability objective of the company is to focus on such areas where biggest
difference can be achieved. Heineken also work to provide best quality products to achieve the
maximum customer satisfaction. The company strategies regarding employee’s satisfaction make
sure that employees get best in class remuneration, health benefit, rewards and excellent working
conditions (Heineken: Sustainability Review. 2016).
Justification of Definition of Performance
Heineken has excellent organization and it can be easily justified through the reviewing
the organizational analysis and performance analysis above. The overall performance of
Heineken Company that has been evaluated above clearly justify the organization progress and
supports the organization objectives and aims to achieve the highest customer satisfaction
through increasing the overall revenue. Heineken has focused not only on financial growth but
also non-financial growth to achieve overall development. The sustainability performance
regarding environment standards, social development and public relations was maintained at
highest standards so that brand reputation can be maintained together with customer satisfaction
(Nicolescu and Lloyd, 2016).
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22421 Management Decisions and Control 2018 Autumn – Individual assignment
Based on overall analysis, it can be said that Heineken takes all aspects of organizational
performance in consideration in defining the overall business performance in its annual report as
well as sustainability report. The organization performance of Heineken has been evaluated on
basis of financial as well as non-financial grounds so that overall performance can be reported.
Proper justifications have been provided in explaining results gather in performance analysis of
Heineken Company.
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22421 Management Decisions and Control 2018 Autumn – Individual assignment
References List
Annual Report. 2017. Heineken. [Online]. Available
at:http://www.theheinekencompany.com/investors/reports-and-presentations [Accessed on: 31
March, 2018].
Barr, S. 2017. Prove It! How to Create a High-Performance Culture and Measurable Success.
John Wiley & Sons.
Charles, V. and Kumar, M. 2014. Business Performance Measurement and Management.
Cambridge Scholars Publishing.
Heineken: Company & Strategy. 2017. [Online]. Available at:
http://www.theheinekencompany.com/about-us/company-strategy [Accessed on: 31 March,
2018].
Heineken: Sustainability Review. 2016. [Online]. Available at:
www.theheinekencompany.com/-/.../TheHEINEKENCompany/...Report.../Heineken [Accessed
on: 31 March, 2018].
Horváth, P. and Pütter, J.M. 2017. Sustainability Reporting in Central and Eastern European
Companies: International Empirical Insights. Springer.
Jeurissen, R. 2007. Ethics & Business. Uitgeverij Van Gorcum.
Mehta, A. 2009. Organization Development: Principles, Process & Performance. Global India
Publications.
Nicolescu, O. and Lloyd, L. 2016. Challenges, Performances and Tendencies in Organization
Management. World Scientific.
Schermerhor, 2006. Organizational Behavior, 9th Ed. John Wiley & Sons.
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