6_ TUTORIAL ON PMS.pdf - TUTORIAL JULY 2017 JAN 2018 JULY 2020 TOPIC 6 Discussions PMS GROUP 1 July 2017 Traditional financial performance measures have

6_ TUTORIAL ON PMS.pdf - TUTORIAL JULY 2017 JAN 2018 JULY...

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Discussions : PMS TUTORIAL JULY 2017 JAN 2018 JULY 2020 TOPIC 6
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Traditional financial performance measures have limitations and not sufficient to manage an organization. One of the main limitations of these measures is that financial performance measure emphasis only one perspective of performance and they provide limited guidance for future actions. Business need to manage the determinants of their future financial performance, and this is where strategy plays a role. The balanced scorecard introduced by Kaplan and Norton in 1992, is a tool that translates an organisation’s mission, objectives and strategies into performance measures. (Langfield-smith et al., 2015) Required: Explain three (3) characteristics of a balanced scorecard that translate a strategy into performance measurements. (15 marks) July 2017 GROUP 1
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July 2017 Recent interest on the use of non-financial measures (e.g. Balanced scorecard) generally assumes that such measures are essential to overcome the inadequacies of financial measures. However, it remains unclear if the behavioural effects of these non-financial measures are different from those of financial measures; and whether these effects are influenced by the relative importance of non-financial measures vis-à-vis financial measures. (Chong & Sholihin, 2005) Required: Explain four (4) advantages and one (1) disadvantage of non-financial measures used in a manufacturing company.
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