Traditional accounting based measurements, Operation Management

Traditional Accounting Based Measurements and Their Limitations 

Neely (1999) suggests that traditional financial measures of performance are criticised because they: 

  • Encourage short-termist actions
  • Lack strategic focus and fail to provide data on quality, responsiveness and flexibility
  • Encourage local optimism by measuring what can rather than what should be measured
  • Encourage managers to minimise the variances from standard rather than seek to improve continuously
  • Encourage local optimisation by measuring resources separately
  • Fail to provide information on what customers want and how competitors are performing.

 

There is general criticism that financial measures of performance focus on past events rather than the future and that they show the result rather than the cause of management action. 

Eccles (1991) cites several reasons why traditional measures of performance should be changed. Among these are: 

  • The changing nature of work
  • Increased competition
  • The power of information technology
  • National and international awards
  • Changing external (stakeholder) demands
  • Proliferation of improvement initiatives.
Posted Date: 3/15/2013 2:18:23 AM | Location : United States







Related Discussions:- Traditional accounting based measurements, Assignment Help, Ask Question on Traditional accounting based measurements, Get Answer, Expert's Help, Traditional accounting based measurements Discussions

Write discussion on Traditional accounting based measurements
Your posts are moderated
Related Questions

Factors for plant Location choice Safety Requirements : Some production units may present, or may be believed to present potential dangers to the surrounding neighbourhood, e

One of the disadvantages of technology is that it does not allow older workers to postpone retirement. True False

#qu1) Using the transformation process model and systems thinking concepts, explain the key operations TGL works. Pay particular attention to flow of materials and the role played

Function of Dispatching Under dispatching the following functions are included: 1. Assignment of work to individual machines or work places and men, 2. Movement of materi

A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper i

Under what conditions is it ethically defensible to outsource production to a developing world where labor costs are lower when such actions also involve laying off long-term emplo

identify at least one example of probability encountered in everyday life which has not previously been mentioned.

Someone help me to write a paper about projected revenues and profits of selling kids bike in botoga Columbia.

Explain barriers to successful communication. Barriers to Successful Communication: A barrier to successful communication does not allow the transmission of correct and full