Traditional accounting based measurements, Operation Management

Assignment Help:

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.

Related Discussions:- Traditional accounting based measurements

Explain what is the optimal stocking level, Henrique's Correa's bakery prep...

Henrique's Correa's bakery prepares all its cakes between 4am and 6am so they will be fresh when customers arrive. Day-old cakes are virtually always sold but at a 50% discount off

Industrial policy, Industrial Policy The course of action set by the go...

Industrial Policy The course of action set by the government to influence the development of domestic industrial sectors in particular and the direction of the national organiz

Explain did intel use monopoly-like power, In your judgment is Intel a "mon...

In your judgment is Intel a "monopoly"? Did Intel use monopoly-like power; in other words, did Intel achieve its objectives by relying on power that it had due to its control of a

Explain managers for a large retail department store, Recently the managers...

Recently the managers for a large retail department store stated that a study has revealed that female shoppers spend on average 23.5 minutes longer in the store per visit than do

Modelling, what are the characteristics of a good model

what are the characteristics of a good model

Information required for process planning, Information required for Process...

Information required for Process Planning Quantity of work to be along with product specifications. Availability of equipment tools and personnel (giving dates e

Explain would you want to manage an ikea store, Would you want to manage an...

Would you want to manage an IKEA store? Why or why not?

Describe meeting at wagoneer''s headquarters, Tobin is an independent contr...

Tobin is an independent contractor for Wagoneer, Inc. While driving to a meeting at Wagoneer's headquarters, Tobin is texting his supervisor at Wagoneer. As a result of his inatten

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd