Multi-dimensional measurement and multi-tasking Flashcards
What might be a reason to pursue a multi-dimensional measurement?
When you are facing a multitasking problem (distortion) and want to ensure all value-adding tasks are accounted for, and to make the measure more complete through enhanced diversity
What are common challenges when you move from one-dimensional to multi-dimensional
Increased complexity, result can become less valuable, less transparency, weights are necessary
What are the basic principles of a balanced score card?
- It is multi-dimensional statement of performance
- Links balanced reporting to strategy
- introduces the idea of causality of the dimensions
what are the 4 common perspectives included in balanced reporting?
The financial perspective: how should we appear to have financial success?
The customer perspective: what should we achieve to have success with our customer?
The internal business processes perspective: if we honor financial as well as customer requirements, what must we then achieve in our internal processes?
The learning and growth perspective: if we are to continue to succeed and improve, what should we focus on?
In what way does BSC operationalize the task of linking reporting to strategy
It devides each of the perspective into sub-objectives, translate that into a measure, for which targets can be set
Obective -> measure -> target
Explain the cause-effect relationship between the perspectives and their measures
The idea is that “activities” are affecting each other. So, an employees ability to innovation (learning growth), will enhance the differentiation and quality of products (internal), which will enhance customer engagement (customer) and result in higher sales (financial)
What is the difference between a lagging and a leading indicator?
Lagging indicators show the performance of the companies’ operations (e.g. profits). It is generalized.
Leading indicators are performance drivers and specific to the company
Define the multi-tasking problem
Concerns a situation where some of the agent’s tasks are neglected or downgraded by the agent because they are not included in their performance evaluation. This creates an imbalance between their effort and time allocation of the tasks leading to distortion and incompleteness
How does Hannaway suggest solving the multi-tasking problem and what are some considerations to this decision.
Solution is job design - the division of the multi-task job into two single task jobs (specialization).
Concerns: difficult to separate, loss of synergy, coordination costs.
pro: control of tasks, good resource allocation, specialization leads to high identification, clear objectives, pay-for-performance is possible.
in the end: when is the cost of the loss of effectiveness (caused by lack of coordination) high enough to off-set the benefits of specialization.
Hannahways argues benefits of specialization outweigh costs of coordination
