ACCA Strategic Professional · Advanced Performance Management · Performance hierarchy
Kestrel Logistics has a strategic goal of growing revenue by 40% over five years. Middle managers have been given annual cost-per-delivery targets and depot utilisation targets, but depot supervisors are rewarded only on daily deliveries completed, regardless of cost or customer complaints. What is the main weakness this reveals in the performance hierarchy?
The weakness is a lack of goal congruence between levels. Supervisors are rewarded only on daily deliveries, which can conflict with the tactical cost targets and the strategic growth goal, so operational behaviour is not aligned with objectives higher in the hierarchy.
- ALack of goal congruence between operational measures and tactical and strategic objectivesCorrect
- BExcessive focus on long-term strategic measures at the expense of short-term ones
- CToo many measures at the strategic level, causing information overload
- DFailure to benchmark the company against external competitors
Explanation
Supervisors are rewarded on volume alone, so their behaviour may conflict with the cost-per-delivery and growth objectives set higher in the hierarchy. This is a failure of alignment, or goal congruence, between levels. The scenario gives no evidence of too many strategic measures or an over-long-term focus, and benchmarking is not the issue.
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