chapter 15

Question 1

accounting based performance measures, the following steps may be followed

Answer 1

1. choose performance measures that align with top management’s financial goal
2. determine the time horizon of each performance measure
3. define the components of each performance measure
4. choose a measurement alternative for each measure
5. decide on target level performance
6. choosing the timing of feedback

Question 2

measurement alternatives for performance measures

Answer 2

1. current cost
2. historical cost

Question 3

strategic feedback should enable managers to test if the strategy produces expected results. if not, it could be due to one of two causes

Answer 3

1. implementation problems
2. an invalid strategy

Question 4

to discourage short sighted behavior, additional measures of performance should be used

Answer 4

market share
customer complaints
personnel turnover rates
personnel development