Page 46 - Stakis Consolidated Teaching Note
P. 46
Performance
Performance as measured by the financial health of the
company can be split into three time periods.
Period one pre 1988
Period two 1988 - 1991
Period three 1991 to the present
In the first period the organisation had lost shape and had
lost direction. Strategically, however, it was in a relatively
strong financial position. It could be classified as cash rich.
In the second period under Andros the company
embarked on a strategy of major growth but there was no
control over the implementation of that strategy. The
period also coincided with the onset of more hostile
economic conditions. The outcome was rising costs, both
capital and operating, at a time when operating revenues
were declining. Reserves were rapidly used up and
borrowings increased to a level that could not be
sustained.
The third period was one of retrenchment and
turnaround. Margin and budgetary control were re-
emphasised. Anything not vital to the effective
performance of core activities was sold off. The result was
the emergence of a company which was both financially
and strategically sound.
