BUS 424 Chapter Notes - Chapter 11-12: Balanced Scorecard, Inventory Turnover, Asset Turnover

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 424
• Professor: Johnny Jermais

Document Summary

Approaches to overcome myopia: reduce pressure for short-term profit, reduce the weighting placed on the annual profit target and emphasize other longer-term performance indicators. Market share and technical break-through: make the short-term profit targets easier to achieve. May trigger slackness of losing concentration on short-term results: control investments with precaution reviews, use financial result controls to reward improvements in short-term operating performance. Minimize operating expenses to maximize operating income. Managers are charged with making their businesses lean, efficient, and profitable in the competitive environment: combination of nonfinancial and performance indicators and action controls. Managers are charged with developing new business opportunities that might replace the existing business in the future: extend the measurement horizon (use long-term incentive, measurement congruence. Measurement precision and objectivity are significant to directly measure. Improve accounting profit measures: provide a better matching of revenues and expenses. Adjust depreciable lives of fixed assets and adopt current value depreciation: recognize profits more quickly.