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Henan agricultural university zheng Ch 4 -1Chapter 4 The Internal Assessment Henan agricultural university zheng Ch 4 -2Chapter OutlineThe Nature of an Internal AuditThe Resource-Based View (RBV)The Internal Factor Evaluation (IFE) MatrixThe Learning CurveHenan agricultural university zheng Ch 4 -3The nature of internal auditn Internal AnalysisqResources, capabilities/competencies, core competencies analysisqActivities - Value ChainnOperation established relationships with customers; the reputation of the firms products and services for quality and reliability The reputation of the firm with suppliers ( component suppliers, banks and financiers, employees and potential employees) with governments and with the community Brand recognition Brand equity Percent of repeat buying Objective measures of comparative product performance Surveys of corporate reputation Human Resources Employees Training Intelligence, knowledge, skills, abilities Loyalty Employee number and turnover Level of skills and capabilities required Staffing levelsHuman ResourcesHenan agricultural university zheng Ch 4 -7Core competencen Core competencies are the collective learning of the organization, especially how to co-ordinate diverse production skills and integrate multiple streams of technologies. Three tests to identify core competenceq Add greater customer value q Equip a business with ability to enter and successfully compete in several marketsq Be difficult for competitors to imitateBy Prahalad and Hamel (1990)Henan agricultural university zheng Ch 4 -8Firm InfrastructureHuman Resource ManagementTechnology DevelopmentProcurementInboundlogisticsOperationsOutboundlogisticsMarketingrate of learning decreases as ignorance decreases Henan agricultural university zheng Ch 4 -24Learning curve assumptionsn The time required to complete a specified task or unit of a product or item will be less each time the task is performed;n The unit time will reduce at a decreasing rate;n The decrease in time will follow a certain pattern, such as negative exponential distribution shape( 指数分布形态)Underlying Power Lawy = axby is the labor hours required to build unit #xa always represents the theoretical labor hours required to build the first unit produced (a positive number)x always represents the number (count) of an item in the production sequence (unit #1, #2, #3, etc.) b is called the natural slopeit represents the rate of learning always a negative number except for (rare) “forgetting”The “power law” formula is the basis of this modelNotation for the U Modeln A helpful notation for the U model is:Hn = H1nbHours to build unit #nHours to build unit #1Unit numberNatural slopeNote: the notation T1 is commonly used for what is here designated H1. In the paper, T is reserved for “total hours.”Natural vs. Percentage Slopen Learning curve calculations generally (but not always) require a value for bq b is typically a negative number between 0 and 1q b is a mathematically appropriate but non-intuitive number for describing slopeq For convenience, analysts universally use (in conversations as opposed to calculations) another expression called “percentage slope,” where slope is a number between 0 and 100 (except that if “forgetting” occurs, percentage slope can exceed 100)q We use S as a symbol for percentage slopeHenan agricultural university zheng Ch 4 -28Learning Curven The learning curve theory is based on a doubling of productivity. More specifically, when output or production doubles, the reduction in time per unit affected by the learning curve rate. n For example, an 80% learning rate means the second unit takes 80% of the time of the first unit, the fourth unit takes 80% of the second unit, the eighth unit takes 80% of the fourth unit, and so on. Henan agricultural university zheng Ch 4 -29LEARNING CURVEOutput( cumulative quantity)Total Hours/Cost(per unitof output)BAHenan agricultural university zheng Ch 4 -30Understanding Sn In industry, S typic

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