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Critique of Performance Measurement
This section brings together material from preceding data in this lesson in order to provide a critical appraisal of performance measurement. In a sense, all of the material in the study pack can be related to the measurement of performance; good managers make good decisions, form good plans, and establish good control practices and this should be reflected in measures of performance. An alternative view is that performance measurement drives the decision making, planning and control functions of management; managers manipulate performance results so that they can appear to be performing well. This provides an explanation for ROI approaches to the capital investment decision; managers are more concerned to appear to be making the right decision than to be making the right decision in reality. Whatever the view, transfer pricing and performance measurement provides good material for assessing the problems facing the management accountant who is trying to devise systems which will benefit organizations. The critique which follows provides a summary of the problems of ensuring that performance measurement systems achieve the purposes for which they are designed. The list which is provided can be considered as coverage of some of the themes which influence management accounting as a whole.
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