To monitor the creation value for their key stakeholders, assume that Netflix uses the following performance measures:

a. Based on your understanding 8 characteristics of effective measures listed by McNairConnolly and Merchant, identify potential problems with each of the above performance measures. Your answer should identify the problematic performance measure and discuss which performance characteristics has not been met.

b. For each problematic measure identified in (a) provide one alternative measure. Explain your answer

 

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Value Creation Goal Stakeholder: Shareholders Value creation goal: Deliver long-term returns to shareholders Stakeholder: Customers Value creation goal: Deliver a wide range of entertainment content Stakeholder: Suppliers of entertainment (film and television) content Value creation goal: Develop collaborative relationships with entertainment content suppliers to produce creative entertainment content Performance Measures % of reduction in operating costs Increase in the amount of entertainment content available per month Average suppliers' satisfaction with their collaborative experience with Netflix's. (Scale range: 0= dissatisfied; 1=satisfied) Value Creation Goal Stakeholder: Shareholders Value creation goal: Deliver long-term returns to shareholders Stakeholder: Customers Value creation goal: Deliver a wide range of entertainment content Stakeholder: Suppliers of entertainment (film and television) content Value creation goal: Develop collaborative relationships with entertainment content suppliers to produce creative entertainment content Performance Measures % of reduction in operating costs Increase in the amount of entertainment content available per month Average suppliers' satisfaction with their collaborative experience with Netflix's. (Scale range: 0= dissatisfied; 1=satisfied)

Answer rating: 100% (QA)

a One potential problem with the performance measure of reduction in operating costs is that it does not take into account the quality of the entertai... View the full answer