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 largest stnd dev, The Good Chocolate Company. Specifica...

The Good Chocolate Company. Specifications for the 12-ounce bar are 330 grams to 350grams. What is the largest stnd dev, in grams, and still considered capable of ave fill of 340 g

Line balancing, what do you understand by “line balancing “? What happens i...

what do you understand by “line balancing “? What happens if balance doesn’t exist?

Organizing process flows, Organizing Process Flows Five types of proc...

Organizing Process Flows Five types of process are distinguished. They are Project Production System Job Shop Production system Batch Production system

Explain what is the firm''s break-even point in sales dollars, You have dev...

You have developed the following income statement for the Hugo Boss Corporation. It represents the most recent year's operations, which ended yesterday. Sales $ 50,439,375 Va

Explain managers tend to make teams too large, With regard to the question ...

With regard to the question of team size (i.e., how big the team should be), all of the following are true, except: a. Most of the time, teams should be fewer than 10 members b. Ma

Explain why should be performed before signing a contract, What due diligen...

What due diligence should be performed before signing a contract?

Explain delegation of authority, Explain delegation of authority. Dele...

Explain delegation of authority. Delegation of authority: Delegation may be described as the entrustment of responsibility and authority to the other and the creation of acco

Explain inventory control, Explain inventory control. Inventory Contro...

Explain inventory control. Inventory Control - its importance and scope: Inventory control is the scientific way of finding out how much stock  be maintained so as to meet the

Determine the order winning criteria for organisation, 1. What are the orde...

1. What are the order winning criteria for this organisation? Where does the company sit in Schmenner's Service-Process matrix and can you detect the adoption of the principles und

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