BUSI 4008 Lecture Notes - Lecture 8: Controllability, Balanced Scorecard, The Delay
26 Feb 2018
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Pressures to act myopically six financial results control remedies that can be used to alleviate the myopia problem: reduce pressures for short-term profit: use one of two ways: Reduce the weighting placed on the annual profit target and emphasize other, longer-term performance indicators; such as market share and technical breakthroughs. However, this could cause slackness: control investments with preaction reviews. Reward improvements in short-term operating performance only. Need to distinguish between operating expenses, and developmental expenses. Operati(cid:374)g e(cid:454)pe(cid:374)ses: (cid:858)toda(cid:455)(cid:859) (cid:271)usi(cid:374)ess: managers are charged with making their business lean, efficient, and profitable in their competitive environment controlled through tight financial results controls. Every measure should be part of a chain of cause and effect relationship. All measures eventually link to organizational outcomes. Difficult to determine how many measures are needed to define performance completely. Balanced scorecard systems are said to ideally contain 23-25 measures.
