EC 7

Question 2

McNamara fallacy

Answer 2

If you can’t measure what is important, what you measure becomes important

Question 3

Cambell’s law:

Answer 3

if you start to measure relatively inaccessible strategic constructs then people will overly focus on the measure and forget the stratey.

Question 4

Law of measurement

Answer 4

Measure management arises when performance measure capture strategic constructs with error, the people being evaluated are aware of this fact and people have discretion to distort either operations or reporting

Question 5

Surrogation

Answer 5

is the tendency of managers to lose sight of the strategic construct a performance measure is intended to represent and subsequently acts as the measure is the construct of interest

Question 6

Information effect

Answer 6

hen employees are involved in the strategy selection, they acquire information that helps them to better understand the strategy

Question 7

motivation effect

Answer 7

involvement in the strategy gives employees a sense of ownership and increases the identification with the organizational objectives

Question 8

narrative reporting

Answer 8

is a supplement to objective performance evaluation in which employees explain & justify the decision they have taken in the past

Question 9

Compensation effect

Answer 9

as the value of the employees specific information is lower under rotation, principals will pay less for reported information about bias under rotation

Question 10

Reporting effect

Answer 10

because rotation increases the relative importance of the principals welfare for the employees reporting decision, employees will reports more under rotation