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 public sector unions, Public sector unions now account for more tha...

Public sector unions now account for more than half of union members, while the private sector accounts for less than half. Why has this change occurred?

Explain how would you measure marketing productivity, How would you measure...

How would you measure marketing productivity? What measures would you use and why? Explain.

Explain brand equity, What is your understanding of the term: Brand Equity?...

What is your understanding of the term: Brand Equity? How do marketers develop brand equity for their products/services relative to competition? Provide an example of a brand/produ

Describe expect it to take for the customer to wait in line, A toll tunnel ...

A toll tunnel has decided to experiment with the use of a debit card for the collection of tolls. Initially, only one lane will be used. Cars are estimated to arrive at this experi

Explain human resource role, A program that provides employee relocation an...

A program that provides employee relocation and trailing spouse employment assistance is an example of which human resource role: Answer A) counsellor B) employee advocate C) strat

Explain some inherent challenges in using decision trees, What are some inh...

What are some inherent challenges in using decision trees effectively in today's organizations? How can these challenges be overcome?

Depict a forecast on a graph with the actual data, Develop a forecast for y...

Develop a forecast for years 2 through 12 using exponential smoothing with %u03B1 = .4 and a forecast for year 1 of 6. Plot your new forecast on a graph with the actual data and th

Explain what is the bias, Given forecast errors of 5, 0, - 4, and 3, what i...

Given forecast errors of 5, 0, - 4, and 3, what is the bias?

Solution to the transportation problem, A transportation problem can be sol...

A transportation problem can be solved by two methods using (a) simplex methods and(b) transportation method. We shall illustrate these with the help of an example. Exam

Explain motivating employees, What are some effective ways companies are mo...

What are some effective ways companies are motivating employees for (retention and best return). Will rate accordingly. Thanks

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