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ACCA Strategic Professional · Advanced Performance Management · Non-financial performance measurement

Marlowe Components plc is redesigning its performance measurement system using the Performance Prism. The finance director proposes starting by setting targets for operational processes and then deciding which stakeholders to report to. Which statement best describes the correct starting point under the Performance Prism?

The Performance Prism starts with stakeholder satisfaction: identifying the key stakeholders and what they want and need. Strategies, processes and capabilities are then designed to deliver that satisfaction, and stakeholder contribution is considered afterwards. Starting with processes reverses the stakeholder-led logic of the framework.

  1. ABegin with stakeholder satisfaction, identifying who the key stakeholders are and what they want and needCorrect
  2. BBegin with processes, identifying the critical processes needed to deliver the strategy
  3. CBegin with capabilities, identifying the skills and technology the firm owns
  4. DBegin with stakeholder contribution, identifying what the firm needs from each stakeholder

Explanation

The Performance Prism starts with stakeholder satisfaction (who are the stakeholders and what do they want and need). Strategies, processes and capabilities are then derived, and stakeholder contribution comes last. Starting with processes reverses the logic of the framework, which is stakeholder-led rather than financially or process led.

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