Chapter 9 - Control Measures

Question 1

Performance Measurement

Answer 1

Use of statistical evidence to determine progress towards specific objective

Question 2

Balanced Scorecard

(Kaplan + Norton)

Answer 2

Demonstrates the linkages between getting things right and being sucessful

• Financial - successful financial performance
• Customer - appear efficient and reliable to our cmrs
• Internal Processes - what we must do well to satisfy our stakeholders and cmrs
• Innovation + Learning - what we need to achieve our vision

Question 3

3 basic types of Benchmarking (Seber)

Answer 3

• Internal - another department
• Competitor
• Process/Activity - similar process in non-competitor

* Benchmarking doesn’t identify reasons because doesn’t compare competences directly

Question 4

Stretch Targets

Answer 4

• Difficult to achieve
• Demotivating
• Take more risks / reduce quality

Question 5

Poor design of targets

(Berry, Broadbent, Otley)

Answer 5

• Sub Optimisation - focus on some targets, neglect others
• Myopia - short term target over long term goals
• Ossification - unwilling to change inappropriate measure
• Gaming - fix results e.g. underachieve for easier target

Question 6

Financial Targets

Answer 6

• Expected by employees
• Cheap to monitor
• Focus on resource generation
• Comparable across companies

Question 7

Non-Financial Measures

Answer 7

• Earlier identification of problems
• Wider view of performance
• More easily undertood by staff

BUT

• More subjective
• More difficult to benchmark against rivals