Chapter 18 – Performance Measurement to Support Business Strategy
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18–43. (20 min.) Functional measures.
Answers will vary, but might include any of the functional measures shown in Exhibit 18.7.
The following is one example. An important critical success factor for many airlines is the
18–44. (45 min.) Performance measures.
Answers will vary. The advantages are easier to identify. They provide a measure of
6.
b. As a manager of the company, you probably want to know what caused the decline
Chapter 18 – Performance Measurement to Support Business Strategy
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18–46. (40 min.) Objective and Subjective Performance Measures.
Answers will vary:
a.
An advantage of using a combination of performance measures is that for any one
dimension of performance (communications skills, for example), a good measure can be
18–47. (40 min.) Operational performance measures: Mid-States Metal Finishers.
a. Answers might include:
The percentage of orders filled on-time, the percentage of defective units produced
Chapter 18 – Performance Measurement to Support Business Strategy
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18–48. (30 Minutes) Productivity Measures: McKinley Industries.
a. Total productivity = Value of output ÷ Value of inputs (materials, labor, and
overhead).
Year 1:
Total output value …………….
($370 x 22,000)
=
$8,140,000
Materials value ………………..
($90 x 40,000)
=
$3,600,000
Labor value …………………….
($19 x 38,000)
=
722,000
Overhead value ……………….
(given)
=
2,900,000
$7,222,000
Total factor productivity …….
($8,140,000 ÷ $7,222,000 =)
1.127
Year 2:
Total output value …………….
($360 x 27,000)
=
$9,720,000
Materials value ………………..
($85 x 45,000)
=
$3,825,000
Labor value …………………….
($22 x 50,000)
=
1,100,000
Overhead value ……………….
(given)
=
3,200,000
$8,125,000
Total factor productivity …….
($9,720,000 ÷ $8,125,000 =)
1.196
b. Total factor productivity improved from 1.127 to 1.196. Although we know from
Exercise 18-33 that labor productivity declined while materials productivity
increased, it appears that, on balance, productivity in general improved from Year 1
to Year 2.
c. Total factor productivity provides a comprehensive measure of productivity changes
and is not limited to the changes in a single factor. Therefore, it provides a better
overall picture of efficiency. Partial productivity measures provide better information
about where productivity problems might be and, therefore, are more useful for
Chapter 18 – Performance Measurement to Support Business Strategy
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18–49. (20 Minutes) Employee Involvement.
a. Answers will vary, but might include:
By providing line employees the authority to make decisions, customer satisfaction can
increase. The employees can make timely decisions regarding how providing a special
Chapter 18 – Performance Measurement to Support Business Strategy
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Solution to Integrative Case
18–50. (40 min.) Balanced Scorecards and Strategy Maps: University of California,
Davis.
a. Some organizations are concerned that names of new programs label them as the
latest fads and that employees will automatically resist them for that reason. Many
university employees are resistant to change and reject the application of a “corporate”