ACCA Strategic Professional · Strategic Business Leader · Concepts of strategy
Tessaly Retail's mission is to 'delight customers through sustainable sourcing'. A new CFO proposes that managers' bonuses depend only on quarterly profit. Using Johnson, Scholes and Whittington's view of mission and strategic purpose, what is the main concern?
The main concern is misalignment: bonuses based only on quarterly profit may encourage managers to compromise sustainable sourcing and customer delight, so incentives would contradict the stated mission. Profit remains a valid objective, but it should be balanced with measures that support the mission.
- AQuarterly profit is not a financial measure, so it cannot be an objective
- BThe incentive may conflict with the stated mission and push managers toward behaviour inconsistent with its purpose and valuesCorrect
- CBonuses should depend only on non-financial measures
- DA mission statement should override all financial objectives
Explanation
Mission should guide strategic purpose and behaviour. A bonus tied solely to short-term profit could reward cutting sustainable sourcing, creating inconsistency between stated purpose and real incentives. Profit is a valid financial measure, and the answer does not require only non-financial measures or that mission override all financial aims.
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