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Unformatted text preview: Chapter 14 Managing for Results Questions for Review and Discussion 1. The criteria that operational objectives should satisfy include the following: • They should represent true ends rather than means. They should focus on results, not the way in which the results are achieved. They should not preclude alternative means of obtaining the same goal. • Whenever feasible they should focus on outcomes (results received from a service), not outputs (units of result provided). • They should be readily measurable, yet capture the desired outcome. • They should be measurable within a sufficiently short time so that corrective actions can be taken. • They must be reasonably precise, leaving little room for individual interpretation. 2. By establishing objectives an organization invariably indicates which of its activities are of primary, and which are of secondary, importance. It thereby may suggest that some departments or units are of greater value than others. 3. Program budgets allocate resources to specific programs, rather than to “objects,” such as salaries, travel, supplies, etc. Programs, by definition, are composed of activities that are directed toward a common goal. Thus, program budgets link expenditures directly to goals. 4. The key elements of a zero-base budget decision package include: • a statement of the activity’s objectives; • the consequences of not performing the activity; • alternative means of accomplishing the same objective; • expected inputs, outputs and outcomes at various levels of funding. 5. Expenditures often cannot be causally linked to outcomes. In reality, for example, more money for police cannot be tied directly to an outcome, such as reduced crime. It can, however, be associated with outputs, such as a greater number of officers on patrol. 15-1 6. All organizations should report on how well they achieve their objectives. The primary objective of businesses is to earn a profit, a goal that is reported upon in conventional financial statements. The primary purposes of governments and not- for-profits are to provide services, promote causes, or carry out specified activities for the benefit of their constituents. The extent to which the organizations achieve these objectives cannot be assessed with conventional financial measures. They require measures tied specifically to their objectives — i.e., measures of service efforts and accomplishments. 7. The three main categories of SEA indicators are: • Measures of efforts — i.e., inputs • Measures of accomplishment — i.e., outputs and outcomes • Measures that relate efforts to accomplishment — i.e., efficiency measures (the ratio of inputs to outputs) and cost-outcome measures (the ratio of inputs to outcomes)....
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This note was uploaded on 04/13/2010 for the course ACCOUNTING 217 taught by Professor Bergen during the Spring '10 term at University of Phoenix.
- Spring '10