Performance Measurement (5)

Question 1

What is short-termism?

Answer 1

When there is a bias towards short-term rather than long-term performance

Question 2

Decisions which involve sacrifice of longer-term objectives (asset expenditure)

Answer 2

Postponing asset expenditure projects to protect short-term cash flow and profits

Question 3

Decisions which involve sacrifice of longer-term objectives (Cutting R&D)

Answer 3

Cutting R&D expenditure to save operating costs, and so reducing prospects for future product development

Question 4

Decisions which involve sacrifice of longer-term objectives (Quality control)

Answer 4

Reducing quality control, to save operating costs

Question 5

Decisions which involve sacrifice of longer-term objectives (Customer service)

Answer 5

Reducing level of customer service to save operating costs

Question 6

Decisions which involve sacrifice of longer-term objectives (training costs)

Answer 6

Cutting training costs or recruitment

Question 7

Decisions which involve sacrifice of longer-term objectives (future generations)

Answer 7

Using up resource thereby compromising ability of future generation to meet their needs

Question 8

How can managers manipulate results of their performance?

Answer 8

Changing timing of asset purchases

Building up inventories

Speeding up or delaying payments and receipts

Question 9

Performance measured objective (cause of concern)

Answer 9

Identify aspects of performance that may be a cause for concern

Question 10

Performance measured objective (actual performance)

Answer 10

Explain differences between actual performance and plan or expectation, or deteriorating performance over time

Question 11

Performance measured objective (control measures)

Answer 11

Consider ways of taking control measures to improve performance

Question 12

Possible reasons for an increase in rejection rates for faulty production?

Answer 12

Using relatively inexperienced staff to do work. Use cheaper materials

Question 13

Possible measures to improve for an increase in rejection rates for faulty production?

Answer 13

Hire more experienced staff. Provide training and switching back to better-quality materials

Question 14

Possible reasons for an increase in time between taking a customer order and delivery the product to the customer?

Answer 14

Adminisrtative delays in processing customer orders

Question 15

Possible measures to improve for an increase in time between taking a customer order and delivery the product to the customer?

Answer 15

Review procedures and remove any unnecessary administrative tasks such as duplication of paperwork

Question 16

Possible reasons for an increase in frequency of machine breakdowns?

Answer 16

Reduction on amount of routine maintenance work

Question 17

Possible measures to improve for an increase in frequency of machine breakdowns?

Answer 17

Increase routine maintenance of machines

Question 18

Possible reasons for customer dissatisfaction with online sales services

Answer 18

Poor website design

Question 19

Possible measures for customer dissatisfaction with online sales services?

Answer 19

Redesign the website. Hire web design specialists if necessary

Question 20

Possible reasons for longer average time to answer customer calls in a call centre?

Answer 20

Reduction in number of call centre staff

Question 21

Possible measures for longer average time to answer customer calls in a call centre?

Answer 21

Employ more staff

Question 22

Possible reasons for declining labour productivity?

Answer 22

Failure to train staff. Increase in complexity of the work. Use of inexperienced staff

Question 23

Possible measures to improve performance for declining labour productivity?

Answer 23

Hire more experienced staff. Provide training. Give most complex tasks to specialist staff