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ACCA Applied Knowledge · Management Accounting · Performance measurement - application

In the performance pyramid (Lynch and Cross), which pair is correctly identified as the top-level and the bottom-level aspects of the pyramid?

Corporate vision sits at the top of the performance pyramid, and operational measures at department and work-centre level, namely quality, delivery, cycle time and waste, sit at the bottom. The pyramid links strategy downwards to day-to-day operations.

  1. ACorporate vision at the top; department and work-centre measures such as quality, delivery, cycle time and waste at the bottomCorrect
  2. BFinancial measures at the top; customer satisfaction at the bottom
  3. CBusiness operating systems at the top; corporate vision at the bottom
  4. DMarket measures at the top; productivity at the bottom

Explanation

The performance pyramid has corporate vision at the top, business unit objectives below, then business operating systems, and at the bottom the departmental and work-centre measures of quality, delivery, cycle time and waste. The other options reverse or mislabel the levels.

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