Focus on the 'bottom line'; non-financial performance measures
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1. What deficiencies, if any, are there when companies management decisions only consider the effect of the "bottom line"? Provide an example from your accounting experiences if possible.
2. What are some non-financial performance measures?
What do they tell us about the performance of an organization?
Why is it important for managers to include non-financial performance standards in their analysis of their operations?
3. Describe the three broad functions that manager's activities and responsibilities are classified into and provide an example that you are familiar with in each of these functions
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Solution Summary
The expert examines the 'bottom line' deficiencies in companies. Non-financial performance measures are examined.
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ANSWERS
Question 1
Too much focus on the bottom line communicates a very short term management focus. That is, long term profitability and sustainability of the organization is willingly sacrificed for better short term profitability. This management focus also communicates to the workforce that it might be alright to cut corners as long as such actions will result to better bottom line.
Question 2
One non financial performance measure ...
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