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CMA Final · Strategic Performance Management and Business Valuation · Introduction to Performance Management

In a performance management system, which activity most directly converts the organisation's strategic objectives into targets that each division and manager can be held accountable for?

Cascading strategic objectives into divisional and individual targets through goal setting and key result areas is the activity that creates accountability. It links strategy to day-to-day responsibility, whereas statutory accounts, capital cost estimation and audits do not translate strategy into manager-level targets.

  1. ACascading objectives through goal setting and key result areasCorrect
  2. BPreparing the year-end statutory financial statements
  3. CComputing the cost of capital for new projects
  4. DCarrying out an external statutory audit

Explanation

Performance management starts by translating corporate strategy into departmental and individual objectives, often through key result areas and targets. Statutory accounts, cost of capital and audit serve other purposes and do not assign strategic accountability.

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