The biggest problem in designing a performance management system arises as a result of:

Group of answer choices

The tendency for performance management systems to be based entirely on financial targets

A performance management system needs short-term indicators to monitor performance, yet the ultimate goal is to enhance the long-term performance of the firm

Performance targets are always ineffective because individuals will game the system

The personal interests of organizational members need to be taken into account

For the purposes of strategy analysis, it is convenient to view business strategy is primarily a quest for:

Group of answer choices

Attractive markets

Profit

Customer loyalty

Motivated and talented personnel

The entrepreneurs who create business enterprises are motivated primarily by the desire for personal wealth.

Group of answer choices

True

False

Although firms may pursue a variety of goals, the assumption that primary goal of strategy is to maximize profits over the long term may be justified by:

Group of answer choices

The fact that in todays intensely competitive markets, firms must focus on profit maximization in order to survive.

The external pressures on firms for profitability that arises from (i) strong competition in product markets and (ii) the threat that firms that do not maximize profits will be acquired by forms that do.

The legal requirement on Boards of Directors to ensure that companies are operated in the interests of their shareholders.

Shareholder pressure on CEOs to maximizing profits.

Which of the following activities by Starbucks Inc. is least likely to be an example of Michael Porter and Mark Kramers shared value creation?

Group of answer choices

The 2015 Race Together initiative to combat racism and promote racial harmony

The introduction in 2014 of college tuition benefits to employees

Participating in the Coffee and Farm Equity program to benefit growers

Financial and media support for American Red Cross efforts to aid refugees

If a firm is to achieve superior profit performance, it is essential that profitability targets are set for managers. If managers focus on the drivers of profitability rather than profitability itself, their efforts will be diffused.

Group of answer choices

True

False

The Balanced Scorecard is a technique of performance management that establishes and monitors four dimensions of performance:

Group of answer choices

Financial, strategic, operational, and ethical performance

Financial, customer, internal, and learning/innovation performance

Profit, sales, productivity, and asset management performance

Shareholder, customer, employee, supplier, and social performance

For a value for the firm requires that a firm:

Group of answer choices

Earns profits for shareholders, then uses these profits to satisfy the interests of other stakeholders.

Creates customer loyalty, that can then be converted into profit through increasing prices.

Creates value for customers, then appropriate some of that value as profit.

Creates value for employees through attractive pay, benefits, and working conditions, then relying upon employees to drive customer satisfaction and, eventually, profits.

Value refers to the estimated monetary worth of a product or asset.

Group of answer choices

True

False

For a firm to pursue stakeholder interests rather than shareholder interests requires that it maximizes value for all stakeholders rather than maximizes value for shareholders alone. The tools of stakeholder analysis mean that this is not a major problem for management.

Group of answer choices

True

False