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BUS 630 Week 5 DQ 2 Perverse Affects of Some Performance Measures

BUS 630 Week 5 DQ 2 Perverse Affects of Some Performance Measures

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Author: Lester Dunn
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Complete the following exercise and provide a recommendation for each of the four scenarios presented.  There is often more than one way to improve a performance measure. Unfortunately, some of the actions taken by managers to make their performance look better may actually harm the organization. For example, suppose the marketing department is held responsible only for increasing the performance measure "total revenues," Increases in total revenues may be achieved by working harder and smarter, but they can also usually be achieved by simply cutting prices. The increase in volume from cutting prices almost always results in greater total revenues; however, it does not always lead to greater total profits. Those who design performance measurement systems need to keep in mind that managers who are under pressure to perform may take actions to improve performance measures that have negative consequences elsewhere.  For each of the following situations, describe actions that managers might take to show improvement in the performance measure but which do not actually lead to improvement in the organization's overall performance.

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