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ACCA Strategic Professional · Advanced Performance Management · Performance hierarchy

Delmar Logistics is deciding whether its control system should rely mainly on tight, rule-based output controls or on shared culture and trust among staff. Its work is highly creative, outcomes are hard to measure and staff are professionally qualified. According to the control frameworks commonly used in performance management, which approach fits best?

Cultural or clan control, supported by selective outcome measures, fits best. When work is creative, outputs are hard to measure and staff are skilled, shared values and trust guide behaviour better than detailed rules, standard costs or price-based market control, which suit repetitive and measurable activities.

  1. ACultural or clan control, supported by selective outcome measuresCorrect
  2. BBureaucratic control through detailed rules for every task
  3. CPure market control based on external price comparisons
  4. DRigid standard costing of each activity

Explanation

Where outputs are ambiguous and staff are skilled, clan or cultural control using shared values works best, with limited measures. Bureaucratic rules and rigid standard costing suit stable, repetitive tasks, and market control needs measurable outputs with comparable prices.

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