STRATEGIC PERFORMANCE MEASUREMENT SYSTEMS: TRANSLATING STRATEGY INTO RESULTS
A large and growing number of companies worldwide are adopting strategic performance measurement (SPM) systems to help them execute their business strategies. SPM systems use some combination of financial, strategic, and operating measures to evaluate management's success in improving operating efficiency and adding value for shareholders. In many cases, the SPMs also provide the primary basis for rewarding top management, divisional operating managers, and, increasingly, rank-and-file employees. Some SPM systems are based entirely on a financial measure like economic value added (or EVA), which encourages managers to consider the opportunity cost of investor capital in making all operating and investment decisions. Other systems are based heavily on nonfinancial considerations, such as the balanced scorecard's emphasis on customer and employee satisfaction, operational excellence, and new product introduction. 2000 Morgan Stanley.
Year of publication: |
2000
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Authors: | Gates, Stephen |
Published in: |
Journal of Applied Corporate Finance. - Morgan Stanley, ISSN 1078-1196. - Vol. 13.2000, 3, p. 44-59
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Publisher: |
Morgan Stanley |
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