3 The Chemical Services Group plc (CSG), which operates a divisionalised structure, provid

题目

3 The Chemical Services Group plc (CSG), which operates a divisionalised structure, provides services to industrial and

domestic customers in Swingland, a country whose economic climate is subject to significant variations. There have

been a number of recent changes at board level within CSG and therefore the managing director called a meeting of

the board of directors at which each of four recently appointed directors put forward their view as to what their primary

focus should be. These were as follows:

The research and development director stated that ‘my primary focus is upon ensuring that we continue to develop

the products and services that satisfy the requirements of our existing and potential customers’.

The finance director stated that ‘my primary focus is upon keeping our investors satisfied’.

The human resources director stated that ‘my primary focus is upon ensuring that we take all the steps necessary to

establish and maintain our reputation as a responsible employer’.

The corporate affairs director stated that ‘my primary focus is upon the need to ensure that we are recognised as a

socially responsible organisation’.

Required:

(a) Discuss the criteria that should be considered in deciding upon suitable performance measures in respect of

the primary focus of each of the FOUR directors of CSG providing THREE appropriate quantitative measures

for each primary focus.

Note: your answer may include financial or non-financial quantitative measures. (12 marks)

参考答案和解析
正确答案:
(a) The primary focus of the research and development director
There is a need to measure the ability of CSG to offer up to date services that are sought after by existing and potential
customers. In this regard it would be relatively easy to determine the number of new products/services introduced in previous
periods. The performance of individual innovations should also be assessed. Also the aggregate expenditure on the
development of new services may indicate how CSG has performed with regard to offering up to date, customer focused
services.
The primary focus of the finance director
CSG could use return on capital employed (ROCE), economic value added (EVA) or residual income (RI) as measures of
financial performance. EVA and RI are both superior to return on capital employed (ROCE) in that each method is more likely
to develop goal congruence in terms of acquisition and disposal decisions. It is vital that any performance measure chosen
is consistent with the NPV rule. The use of RI could prove problematic when managers adopt a short term outlook and use
short term performance measures as decisions may not be consistent with the NPV rule. EVA attempts to avoid the problems
associated with understated asset values that arise in the use of ROCE and RI. Current values should be used as opposed to
historical costs.
The primary focus of the human resources director
CSG could use measures such as the rate of staff turnover, the level of absenteeism, training costs per employee and the
number of applications received for each job vacancy. These measures may provide an indication of the extent to which CSG
can be regarded as a socially responsible employer.
These measures should be compared with those of prior periods and targets. Employee attitude surveys may also be
undertaken on a systematic basis in order to assess matters such as the degree of satisfaction with the payment systems that
are in operation, management style. and working conditions.
The primary focus of the corporate affairs director
CSG could use measures such as the amounts spent on the disposal of waste chemicals, the number of complaints received
from clients and members of the public and the total of contributions made to organisations which seek to meet social
objectives, e.g. charities, schools and hospitals.
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