ACCA Strategic Professional · Strategic Business Leader · Public sector governance

A national transport authority sets its objective as 'reduce average commuter journey time by 10%'. Over the year, it achieves the target by diverting funds from maintenance, causing a rise in safety incidents and a decline in rural services that are not measured. Which issue in public sector performance management does this most clearly demonstrate?

This shows measure fixation: concentrating on a single target led managers to meet it while neglecting unmeasured but important objectives such as safety and rural services. Narrow performance indicators in public bodies can distort behaviour and undermine overall public value.

AMeasure fixation, where focus on a target distorts behaviour and neglects unmeasured objectivesCorrect
BFailure of the profit motive to drive efficiency
CExcessive reliance on market pricing to allocate resources
DAgency problems caused by shareholder dominance

Explanation

Narrow targets in public bodies can lead to gaming and neglect of unmeasured but important aspects (measure fixation or target distortion). Here the journey-time target was met at the cost of safety and rural service. The other options involve profit, pricing or shareholders, which are not present.

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