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

Analyze the relationship between analysis and planning, Analyze the relatio...

Analyze the relationship between analysis, planning, implementation, and control. Provide an example of a product or service that flows through the relationship. Break down this pr

Define mathematics tends to lull the unsuspecting, C.W. Churchman once said...

C.W. Churchman once said that "mathematics tends to lull the unsuspecting into believing that he who thinks elaborately thinks well." Do you think that the best QA models are the o

Explain effectively manage supply risks, To effectively manage supply risks...

To effectively manage supply risks, the supply manager must: inform the corporate risk officer of a potential risk, await instructions, and implement the directive. Seek input from

Case study, Bloomsday Outfitters produces T-shirts for road races. They nee...

Bloomsday Outfitters produces T-shirts for road races. They need to acquire some new stamping machines to produce 30,000 good T-shirts per month. Their plant operates 200 hours per

Investment triple itself at what interest rate, At what rate of interest, c...

At what rate of interest, compounded annually, will an investment triple itself in (a) 8 years ? (b) 10 years? (c) 12 years?

Integrated solutions in product design, Integrated solutions in product des...

Integrated solutions in product design and control of machinery are based on    CAD and CAM technologies.

Explain in a state where contributory negligence applies, In a state where ...

In a state where contributory negligence applies, a motorist that is about 10% responsible for a collision with another motorist, who sues the other motorist for negligence, will l

Describe the lewin''s change process, Question 1: Change is often resis...

Question 1: Change is often resisted because of the uncertainty and ambiguity it creates, the concern that it might not be in the organisation's best interest. (i) Discuss

Explain what is your total cost for balls each year, You buy tow hitch ball...

You buy tow hitch balls in large lots for the tow tractors you manufacture. You estimate that it costs you approximately 20% of cost to store a ball for a year. Ordering cost is

Case study, Bloomsday Outfitters produces T-shirts for road races. They nee...

Bloomsday Outfitters produces T-shirts for road races. They need to acquire some new stamping machines to produce 30,000 good T-shirts per month. Their plant operates 200 hours per

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