Module 3 - Lecture 5

Question 1

Why do companies require relevant non-financial KPIs for external stakeholders?

Answer 1

To communicate information to external stakeholders

Question 2

When are non-financial measures most important?

Answer 2

• In high uncertainty environments

- Expansionary organisation strategies

Question 3

In what departments might non-financial measure be most useful?

Answer 3

• Sales/marketing

- R&D

Question 4

Why are non-financial indicators leading indicators?

Answer 4

Their impacts are not observed financially until the future

Question 5

How do you maximise financial and non-financial information collectively?

Answer 5

They must be examining the same thing e.g. all looking at profitability

Question 6

What could be the problem in collecting both financial and non-financial information?

Answer 6

Too much information clouds decision making analysis (Surysekar, 2003)

Question 7

Between cost leader and differentiator firms, which are more likely to use non-financial measures?

Answer 7

Differentiator firms