Chapter 10 & 11: Combinations of Measures and Other Remedies to the Myopia Problem

Question 1

1. Timely
2. Precise
3. Objective
4. Congruent
5. Cost effective
6. Understandable

Answer 1

Financial Measures - Accounting-Based

Question 2

• Not making investment, even worthwhile ones (investment myopia)
• Making operational decisions to shift income across periods, even when harmful long-term (operational myopia)

Answer 2

Myopia

Question 3

1. Measure changes in shareholder value directly (market-based instead of accounting-based)
2. Control investments with reaction reviews
3. Improve accounting profit measures
4. Extend the measurement horizon
5. Reduce pressure for short-term profit
6. Measure a set of drivers of future financial performance

Answer 3

Overcoming Myopia

Question 4

The source of value has shifted from tangible to intangible assets (85% intangible assets, 15% tangible assets)

Answer 4

Why do Companies Need a BSC?