ACCA Strategic Professional · Advanced Performance Management · Performance hierarchy
Brightwave Telecom operates three divisions. Group management is concerned that the divisional managers, who are empowered to set their own tactical targets, are all pursuing short-term profit and cutting investment in network quality. The strategic objective is to be the highest-rated provider for reliability within four years. Which recommendation would best address the problem within the hierarchy of performance management?
The best recommendation is to cascade the strategic reliability objective into divisional targets, adding reliability and long-term investment measures, while keeping divisional autonomy over methods. This restores alignment between tactical and strategic levels without the costs of full centralisation or abandoning financial measures altogether.
- ARemove divisional autonomy and set all tactical and operational targets centrally
- BAdd reliability-based targets and long-term investment measures at the divisional level, linked to the strategic objective, while retaining autonomy over how to achieve themCorrect
- CReplace all financial measures with non-financial measures at every level
- DMove the strategic objective to a shorter horizon of one year so it matches divisional targets
Explanation
The problem is misalignment: divisional targets focus on short-term profit and neglect the strategic reliability goal. Cascading strategic objectives into balanced divisional targets, such as reliability and investment measures, restores congruence while keeping the benefits of empowerment. Full centralisation loses those benefits, dropping all financial measures overcorrects, and shortening the strategic horizon abandons the objective.
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