ACCA Strategic Professional · Advanced Performance Management · Non-financial performance measurement
Kalmar Hotels applies the Building Block Model of Fitzgerald and Moon to its business units. Management proposes measuring the hotel's room-booking service on the dimensions of results (competitiveness and financial performance) and determinants (quality, flexibility, resource utilisation and innovation). Which statement correctly describes the relationship between these dimensions?
In the Building Block Model, results such as competitiveness and financial performance are the outcomes of strategy, while determinants such as quality, flexibility, resource utilisation and innovation are the drivers that explain those results. Poor results are therefore analysed by looking at the determinants.
- AResults are the outcomes, while determinants are the factors that drive them, so poor results can be traced back to determinantsCorrect
- BDeterminants are the outcomes achieved, while results are the factors that drive them
- CResults and determinants measure the same outcomes at different time periods
- DDeterminants apply only to the financial measures and results apply only to non-financial measures
Explanation
In the model, results (competitiveness and financial performance) reflect the success of chosen strategies, while determinants (quality, flexibility, resource utilisation, innovation) explain how those results are achieved. The reverse relationship would treat drivers as outcomes, which is wrong.
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