The performance measurement system should encourage each manager to act in a manner that
A)makes the manager's units profits as high as possible.
B)most positively supports the organization's mission and competitive strategies.
C)increases his/her performance reward in the form of profit sharing.
D)reduces the need for informational elements in support of the manager's planning function.

Question

Quizplus · Accepted Answer

The performance measurement system should not only focus on profits but also on how well the manager supports the organization's mission and competitive strategies. This ensures that the manager's actions align with the overall goals of the organization and does not create conflicts or trade-offs between short-term profits and long-term sustainability. Profit sharing can be a part of the performance reward system, but it should not be the only or primary driver of behavior. Finally, reducing the need for informational elements may not necessarily improve the quality of planning and decision-making, which requires relevant and reliable information.

The Performance Measurement System Should Encourage Each Manager to Act