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ACCA Strategic Professional · Advanced Performance Management · Performance optimisation in specific contexts

Brightway Advisory, a consultancy, finds that its engagements differ widely each time because every client brief is unique and staff tailor the work. Which characteristic of services does this describe, and what is the main implication for performance management?

The scenario describes heterogeneity, because each engagement is tailored and differs from the last. This makes it hard to set standard costs, quality benchmarks and comparable measures across engagements, so performance management must use flexible, context-specific measures.

  1. AHeterogeneity, making it difficult to set standard measures and quality benchmarksCorrect
  2. BPerishability, making capacity utilisation the key measure
  3. CIntangibility, making it easy to measure output volumes
  4. DSimultaneity, making inventory control a key measure

Explanation

Variation in service delivery from one engagement to the next is heterogeneity. It makes standardised quality and cost benchmarks hard to set. Perishability concerns unused capacity that cannot be stored, which is not the issue described.

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