tailieunhanh - Lecture Cost management: Measuring, monitoring, and motivating performance (3rd edition) – Chapter 19

Chapter 19 - Strategic performance measurement. In this chapter students will be able to: Discuss strategic decision making, describe how financial and nonfinancial measures are used to evaluate organizational performance, explain the balanced scorecard, . | Lecture Cost management Measuring monitoring and motivating performance 3rd edition Chapter 19 COST MANAGEMENT Measuring Monitoring and Motivating Performance Third Canadian Edition ELDENBURG WOLCOTT CHEN COOK Chapter 19 Strategic Performance Measurement Learning Objectives LO1 Discuss strategic decision making LO2 Describe how financial and nonfinancial measures are used to evaluate organizational performance LO3 Explain the balanced scorecard LO4 Explain how the balanced scorecard is implemented LO5 Discuss how the balanced scorecard affects strategic management and incentives LO1 Discuss strategic decision making Overview of Management Decision Making Strategic Decision Making Strategic objectives are the specific goals that managers choose to measure and monitor help motivate employees to carry out strategies and plans. Tactical plans or short-term plans and budgets give employees specific guidance and responsibilities for progress toward strategic objectives. A vision statement is a theoretical description of what the organization should become. Types of strategies Types of strategies in decision making processes Cost Leadership maintain lower costs than those of competitors Product Differentiation Quality and Functionality strategically differentiate their products and establish market positions LO2 Describe how financial and nonfinancial measures are used to evaluate organizational performance Financial Performance Measures Financial measures provide information in dollars or ratios of dollars. These measures come from the financial accounting information system. Traditionally these often were the only measures used. Examples include division revenue division profit margin or return on sales variances of actual operating results from the budget. Nonfinancial Performance Measures Nonfinancial measures cannot be measured in dollars. Examples include Defect rates Customer satisfaction levels Number of days from a candidate s interview to his or her start date