Strategic management and measuring financial performance in public companies

Abstract

At the present day, businesses should use their resources efficiently, determine exact strategies by exact data and benefit from strategic management in attaining its goals in order to survive from intense competition, follow technological development, catch unforeseen opportunities and turn risks to in favor of its own. By all definitions in literature, we define strategic managements like that it is a process of using production resources efficiently and productively in order to achieve goals of organizations. But basic philosophy of strategic management is to manage activities that enable business to survive in the long-term, have competition advantage and gain return more than average profit rather than managing routine daily activities. Strategic management that we faced as a management technique contains four elements such as vision, mission, strategy and action. Only instrument that determining which stage of strategy is practiced by the business that follows the strategy is performance measuring systems. Businesses measure their performances by financial methods and non-financial methods. Ratio analysis that is used in order 10 measure strategic goals that are classified in three groups as increasing return, diversification revenue mix and decreasing costs will be tested by Altman Z Score model in public companies. This paper aims to show public companies the way of measuring financial performance, evaluating companies periodically and redevelopment continuously and consequently to determine criteria that enable businesses to adapt changing conditions and practice strategic management concept.